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Why do employers withhold taxes every paycheck rather than all at once at the end of the year?
Wiki User
∙ 12y ago
Because you wouldn't get a paycheck at all the last three or four months of the year! Taxes take up as much as 30% of your total pay.
First, no portion of withholding is the employer choice. It is absolutely regulated, required, reviewed, and if not followed, has substantial automatic financial penalties as well as possible criminal ones.
Obviously the employer would prefer to do it less frequently too, as it would essentially cost less (in many ways including in cash flow) and certainly in accounting and other expenses. (And remember, much of what comes out of your paycheck is NOT withholding, but rather things like Social Security (FICA), which the employer is paying as much (and currently much more) than YOUR contribution portion is. Pretty much the same with what must be paid as unemployment and disability insurance, (or your contribution to a group insurance plan) where again, you are paying less than the employer.
And of course that is the point of withholding...."Pay as you go".
While even the government needs the cash flow to spend now, if it wasn't kept from them most people wouldn't be able to pay their bill when due. They would have spent the money!
Now because your asking in such a way as if it would just be so much easier for everyone, and no problem for you to just write the check at the end of the year. How about doing it the other way? You know, pay all your going to owe...but at the start of the year? Sound good? See any problems with it? Can't do it because you haven't made it yet? But you could never do it if you didn't save for it...so you would have to "withhold" on yourself, every paycheck. Same result as having the employer do it for you - EXCEPT, all the things required to do so - calculating, accounting and even sending it in is handled for you. Easier.
Now understand, the self employed, who aren't on someones payroll that handles it for them - they actually do just that. Whenever they get paid, they have to put the right amount to the side to pay over as tax (as well as many of the things previously mentioned - like their insurance premiums. The "estimated" tax is paid over quarterly, and again, all very all very regulated and reviewed, so if you don't pay over enough in each quarterly estimate, as determined by the computer looking back at how much and when you paid it, compared to how much you made and when you file your return (on April 15th for the prior year), you pay additional penalties and interest.
Wiki User
∙ 12y ago
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When did employers have to start paying payroll taxes?
Every month
Can someone tell me how the Arizona A-4 Form works If they take a percentage out of your federal taxes for their state taxeswont you end up owing more money for federal taxes then I am confused?
The percentage referred to on the A-4 form represent how your employer will withhold AZ State Taxes. If for example you get paid every other week and your salary is $2,000.00 per paycheck your federal tax withholding would be $192.40 assuming you claimed zero on your W-4. If you elected 37% on your A-4 an additional $71.19 (192.40 x .37) would be withheld for your AZ state taxes.
How can you borrow againt my income tax?
can i borrow against my income tax. i heard some people got an advance from their income tax last week. all they had to do was present their last paycheck. i have my taxes done by hr block every year
What percentage of a paycheck is taken out for federal tax in Arizona?
Arizona state income tax along with a federal tax is usually withheld from your paycheck as you receive it each pay cycle. While the federal income tax rates are set for each income bracket, AZ state income tax rates do not necessarily align with the federal figures. The variable income tax rate for Arizona is determined by AZ state tax legislation. How much income tax that is withheld from your paycheck depends on which tax bracket you fall under. In general the more you make, the more you will be taxed.How Arizona State income tax rates are structuredThere are 5 income tax brackets for Arizona.If your income range is between $0 and $10,000, your tax rate on every dollar of income earned is 2.59%.If your income range is between $10,001 and $25,000, your tax rate on every dollar of income earned is2.88%.If your income range is between $25,001 and $50,000, your tax rate on every dollar of income earned is3.36%.If your income range is between $50,001 and $150,000, your tax rate on every dollar of income earned is4.24%.If your income range is $150,001 and over, your tax rate on every dollar of income earned is 4.54%.Income tax brackets data last updated March 3rd, 2009.
What is a w-4?
Use Form W-4 to figure the right amount of federal income tax to have withheld from your paycheck. You may want to review your withholding every year, especially after finishing your tax return. You can have more, or less, income tax withheld from your paycheck. What's a Withholding Allowance? It represents your total tax deductions divided by the personal exemption rate. The withholding allowance is related to, but not the same as, the number of dependents you can claim on your tax return. Learn how to fill one out at: http://taxes.about.com/od/preparingyourtaxes/ht/W4.htm
Can you be terminated or have your check withheld because you fail to participate in an exit interview?
In every state I have lived in, there are no circumstances under which an employer may withhold your final paycheck, or any paycheck, for that matter. It would be helpful to know in which state you worked.
Can an employer withhold an employees wages to satisfy an employee debt to that employer?
Generally not without a separate agreement that allows it. For example if the employee bought something through an employee purchase program.
What does is mean to be paid biweekly?
"Getting paid ""bi-weekly"" means that one receives a paycheck every two weeks. Given that some companies pay their bi-weekly employees on the 1st and 15th of every month, however, the employee is not always getting a paycheck every two weeks (as the name implies), but rather simply twice a month. In a 31-day month, the employee will wait 16 days for a paycheck."
Can an employeer hold your paycheck with no reason?
No, employers are generally required to compensate you for the work that you have done. Even if the employer was to lay you off, they still should issue a final paycheck for the work that you have done previously.
Vet money every paycheck?
Alot
When do NFL players receive their paycheck?
Every 2 weeks
How often do qdoba employees receive a paycheck?
Every 2 weeks.
What is a biweekly paycheck?
It's getting payed every 2nd week.
What if your paycheck each week is 500.00 if you want to save 2000.00 in one year how much would you have to set aside if you were have to take out your paycheck each week?
Assuming you get paid $500 every week, you would need to set aside $38.47 out of every paycheck in order to have $2,000 in exactly one year.
By order How often are marines required to get a haircut?
Every paycheck, or command discretion.
What is a bi-weekly pay check?
one paycheck every two weeks
Do employers have to withhold taxes?
In most cases I think they do. Yes...as required by the W-4 filing and other rules...with substantial penalties for non-compliance. And of course if you don't work for an employer, then you must make estimated payments every quarter at least on your own, or have penalty and interest added to your tax.
