Payroll Tax Burden
Discussions debate whether employer-paid payroll taxes and benefits are effectively borne by employees through lower wages or provide tax advantages over direct salary, including comparisons between employee and employer tax responsibilities.
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Surely you can't ignore the tax that is usually paid by the employer?
you realize it doesn't come out of the employee's salary, right? the company has to cough it up separately.
I'm not an American, but in most countries, employers pay tax for employees that employees don't see on their paychecks. In effect, it's income tax whose value is hidden for political purposes: employees only see the headline salary and the headline income tax, but in reality, the cost to the employer is usually more than the headline rate, even without the value of benefits etc.
Could it be the tax on these 'benefits' is less than that for salary? So if you were an employee that would've subscribed to these things anyway, both you and your employer would benefit having the employer pay for the benefits and incur less tax in the process.
It is a concern for the tax payers if company is paying it as expense and deducting it from taxes instead of paying it as (taxed) salary and him doing what he wants with his money. Don't you have rules what can be expensed in the US?
How? It is not like employees don't pay taxes.
You pay employer and employee tax, but you don't get any of benefits. For example if your employer buy a laptop for employee they can deduct it from tax, if you as your own employer buy a laptop, you can't deduct it when you are in scope.
This is a good point; sorry, was not accounting for payroll tax.
great, redistribute it to your employees instead. It will still go to taxes (income).
They are probably referring to the fact that 1/2 the payroll tax is paid by the employer. The employee does not pay this tax, and it is directly paid by the employer for every employee.