Online payroll has grown by leaps and bounds over the last few years. Today, more businesses are using online payroll than ever before.
Don’t believe me? Here are some online payroll statistics that may surprise you.
Intuit Publishes List of Its Most-Liked Features For Online Payroll
Intuit Online Payroll is one of the industry’s leaders. Intuit recently sampled 501 users to determine which features were liked most. The results can be seen here:
Users were allowed to choose multiple options on the survey. Clearly, the most valuable feature of a payroll software is to complete federal and state tax forms – something that Intuit does very well. In close second by just 1% was the ability to pay employees and contractors. Not all services let users pay both employees and contractors. Intuit’s most basic plan, for example, only allows for payment of W-2 employees.
Automatic 2% To 10% Penalty
The IRS will automatically assess a 2% to 10% penalty for failing to “timely and properly” pay federal payroll taxes.
Possible 100% Penalty to Both The Employer and Employee
Both the employer and employee may be eligible for a 100% penalty if the IRS does not receive taxes timely, properly, and accurately. In other words, both the employer and employee will be required to pay 100% of the amount not paid. That penalty is assessed in addition to the 2% to 10% penalty which is automatically applied to your account.
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Seven States With No Income Tax
There are seven states in the United States with no income tax whatsoever. Of course, citizens of these states are still required to pay federal income tax. The seven states include:
- South Dakota
Meanwhile, an additional two states, Tennessee and New Hampshire, have limited income tax, as individuals are only taxed on their dividend and interest income.
1.45% Medicare Tax In United States
All citizens of the United States are assessed a 1.45% Medicare tax on all earnings. Additionally, both employers and employees are required to pay this tax for each employee. Furthermore, an additional Medicare tax of 0.9% is assessed on employees earning over $200,000.
6.2% Social Security Tax In United States
Social Security tax is the largest payroll tax. Like Medicare tax, both the employer and employee are required to pay a 6.2% share each. Social Security tax is capped at certain limits. In 2014, the maximum Social Security tax was $7,254. Or, viewed from another perspective, wages beyond $117,000 are not subject to Social Security taxes ($117,000 x 6.2% = $7,254).
120 million Taxpayers File Electronically
In 2013, 120 million taxpayers chose to file their tax returns electronically through IRS e-file. The IRS claims this is the “safest, fastest, and easiest way” to submit individual tax returns.