Employers withhold taxes from their employees’ paychecks and hand this money over to the various tax agencies. These deductions include:
- Federal Income Tax: The rate of tax is based on the tables found in Publication 15.
- Social Security Tax: The tax rate for Social Security is 6.2 percent, and the Social Security base wage limit is $113,700.
- Medicare Tax: This tax is worth 1.45 percent.
- Additional Medicare Tax: This withholding is another 0.9 percent for employees earning more than $200,000 per year.
- State Income Tax: This varies from state to state. You can visit the Arizona Department of Revenue for more information.
- FUTA: Federal Unemployment Tax (FUTA) is reported and paid by employers separately from federal income tax, and employees do not have this taken out of their paychecks.