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In the United States, payroll taxes are also called employment taxes by the Internal Revenue Service. [ 33 ] In the United States, payroll taxes are assessed by the federal government, some of the 50 states and numerous cities.
This brings the total federal payroll tax withholding to 7.65%.) Employers are required to pay an additional equal amount of Medicare taxes, and a 6.2% rate of Social Security taxes. [13] Many states also impose additional taxes that are withheld from wages. Wages are defined somewhat differently for different withholding tax purposes.
The Social Security tax rate is 12.4% of your paycheck, and another 2.9% goes to Medicare, for a total FICA tax rate of 15.3%. If that seems steep, it’s because you aren’t paying the entirety.
Map of the world showing national-level sales tax / VAT rates as of October 2019. A comparison of tax rates by countries is difficult and somewhat subjective, as tax laws in most countries are extremely complex and the tax burden falls differently on different groups in each country and sub-national unit.
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At the current payroll tax rate of 12.4% (which includes both the employer and employee tax), that additional $7,500 in income will result in a tax bump of $930 per year.