What is a Payroll Tax?

October 19, 2025
Published by Gonzales Group CPA

Are you a small business looking to hire employees, but concerned about properly managing payroll tax? At the Gonzales Group, a respected San Antonio TX CPA, we can help you set up your payroll tax and keep you on track to avoid any problems. Still, it’s always good to understand the basics of running a small business, even if you’re getting help, so here are some tips to help you understand payroll tax.

Payroll taxes are the taxes you, as an employer, are required to withhold from your employees’ wages and pay to federal and state tax agencies. They include a combination of withholdings from employee wages and taxes paid by the employer, and they play a key role in funding programs like Social Security, Medicare, and unemployment insurance. The payroll taxes include:

Federal Income Tax: Withheld based on the employee’s W-4 form.
Social Security and Medicare (FICA): Shared equally between you and your employee.
Federal Unemployment Tax: Paid by the employer to fund unemployment benefits.
State Taxes: May include state income tax, state unemployment insurance (SUI), and other local taxes depending on your location.

Each of these taxes has its own filing deadlines and forms, and missing even one deadline can lead to fines. Mismanaging payroll taxes can be one of the most damaging mistakes a small business can make. Even if you’re trying to do everything yourself to save money, the IRS holds employers personally responsible for unpaid payroll taxes. It’s a serious obligation, and not something to approach lightly.

To properly manage your own payroll taxes you should follow these tips:

Stay organized: Keep accurate records of all payroll activity.
Know your deadlines: Taxes must be deposited on specific schedules.
Work with a professional: A Certified Public Accountant (CPA) or payroll specialist can help ensure you’re staying compliant.

While there are many DIY tools and software options available, working with a CPA gives you peace of mind and lets you focus on growing your business. Among the aid a CPA provides are ensuring the proper classification of employees and contractors, setting up a payroll system that stays up to date with tax regulations, handing filings and payments on time, and letting you know about tax law changes.

As a small business owner, your time is best spent growing your business, not navigating tax laws. Payroll taxes are a critical part of running a compliant and sustainable company, so make the most of the experience of a San Antonio TX CPA like the ones at the Gonzales Group. We can save you time, money, and stress, so reach out today to get started.

Categorised in: Finance Info, Gonzales Group Info, Uncategorized, What Are Business Expenses?, What is a Payroll Tax?

This post was written by Gonzales Group CPA