What payroll taxes does an employer actually pay?

An employer handles two categories. First, taxes you withhold from the employee's pay and forward to the government: federal income tax (based on their Form W-4) plus the employee's 6.2% Social Security and 1.45% Medicare. Second, taxes you owe on top of wages out of your own pocket: a matching 6.2% Social Security and 1.45% Medicare, federal unemployment tax (FUTA), and Florida reemployment tax. For 2026, Social Security applies to the first $184,500 of wages and Medicare has no wage cap. The employer's own share generally adds roughly 8% to 10% on top of what you pay the employee.

What is the difference between trust-fund taxes and the employer's own taxes?

It is the single most important distinction in payroll, because it decides who is personally on the hook. The federal income tax and the employee's share of Social Security and Medicare that you withhold are "trust-fund" taxes: that money was never yours, you are holding it in trust for the government until you deposit it. Your matching FICA and your FUTA are your own business taxes. If cash gets tight and an owner spends the withheld trust-fund money on rent or payroll instead of depositing it, the IRS can assess the Trust Fund Recovery Penalty, equal to 100% of the unpaid trust-fund tax, personally against any responsible person, piercing the corporation or LLC.

When do I file Form 941 and Form 940?

Form 941 is the employer's quarterly federal tax return, where you report wages, withheld income tax, and both shares of FICA. It is due April 30, July 31, October 31, and January 31 for the four quarters. Form 940 is the annual FUTA return, due January 31 (you get until February 10 if you deposited all your FUTA tax on time). Very small employers whose annual employment tax runs $1,000 or less may be notified by the IRS to file the annual Form 944 instead of quarterly 941s, but you cannot choose it on your own, the IRS has to assign you to it in writing.

How often do I have to deposit payroll taxes?

Most new employers are monthly depositors: you deposit the income tax and FICA for a month by the 15th of the following month. Your schedule is set by a "lookback period," if you reported $50,000 or less in employment taxes during it, you deposit monthly; more than $50,000 makes you a semiweekly depositor. One rule overrides both: if you ever accumulate $100,000 or more of payroll tax liability on a single day, you must deposit it by the next business day. Deposits are made electronically through EFTPS, never by mailing a check with the return.

Do I owe Florida payroll tax if I have no state income tax to withhold?

Florida has no personal income tax, so there is nothing to withhold at the state level, which is a genuine advantage over most states. But you still owe Florida reemployment tax (the state's version of unemployment tax) once you become liable, generally after you pay $1,500 in wages in a calendar quarter or have an employee for any part of a day in 20 different weeks. The new-employer rate is 2.7% on the first $7,000 of each employee's annual wages, reported quarterly on Form RT-6. You also have to report every new hire to the state new-hire directory shortly after their start date.

Can I just pay my first worker as a 1099 contractor to avoid all of this?

Not if the facts make them an employee. Whether someone is an employee or an independent contractor is decided by how much control you have over their work, not by what you call them or whether they agreed to a 1099. If the IRS or the Florida Department of Revenue reclassifies a worker you treated as a contractor, you can be hit with the back payroll taxes you should have withheld and paid, plus penalties and interest, and the withheld portion can again become a personal liability. When it is a genuinely close call, it is worth getting a professional read before the first payment rather than after a reclassification.

Payroll Taxes for Your First Employee: A Florida Guide

Payroll Taxes When You Hire Your First Employee in FloridaBy Timothy LeGendre, CPA · Florida License #AC62625 · Last reviewed 2026-08-13A Florida CPA's guide to payroll taxes when you hire your first employee: FICA, FUTA, Form 941, deposit schedules, and the trust-fund trap.Hiring your first employee turns you into a tax collector for the government. From each paycheck you withhold federal income tax (per the employee's Form W-4) plus their 6.2% Social Security (on the first $184,500 of wages for 2026) and 1.45% Medicare (no wage cap), and you pay a matching 6.2% and 1.45% yourself, along with federal unemployment tax (FUTA, 6.0% on the first $7,000 of wages, a net 0.6% after the state credit) and Florida reemployment tax (2.7% new-employer rate on the first $7,000). On a $50,000 hire, the employer's own payroll tax runs about $4,056, roughly 8% on top of the wage. You report on Form 941 each quarter (due April 30, July 31, October 31, January 31) and Form 940 once a year, and you deposit the money electronically through EFTPS on a schedule, usually monthly by the 15th, with a next-business-day rule once you accumulate $100,000 on any single day. The most important concept is the trust-fund distinction: the income tax and employee FICA you withhold were never your money, and spending them instead of remitting them triggers the Trust Fund Recovery Penalty, 100% of the unpaid trust-fund tax assessed personally against a responsible person under IRC 6672, piercing the corporation or LLC. Before the first paycheck you need an EIN (Form SS-4), a W-4 and I-9 from the employee, Florida reemployment-tax registration, and new-hire reporting. Because Florida has no state income tax, there is nothing to withhold at the state level, so the state side is lighter than in most states, though reemployment tax on Form RT-6 still applies.

Frequently asked questions

What payroll taxes does an employer actually pay?: An employer handles two categories. First, taxes you withhold from the employee's pay and forward to the government: federal income tax (based on their Form W-4) plus the employee's 6.2% Social Security and 1.45% Medicare. Second, taxes you owe on top of wages out of your own pocket: a matching 6.2% Social Security and 1.45% Medicare, federal unemployment tax (FUTA), and Florida reemployment tax. For 2026, Social Security applies to the first $184,500 of wages and Medicare has no wage cap. The employer's own share generally adds roughly 8% to 10% on top of what you pay the employee.
What is the difference between trust-fund taxes and the employer's own taxes?: It is the single most important distinction in payroll, because it decides who is personally on the hook. The federal income tax and the employee's share of Social Security and Medicare that you withhold are "trust-fund" taxes: that money was never yours, you are holding it in trust for the government until you deposit it. Your matching FICA and your FUTA are your own business taxes. If cash gets tight and an owner spends the withheld trust-fund money on rent or payroll instead of depositing it, the IRS can assess the Trust Fund Recovery Penalty, equal to 100% of the unpaid trust-fund tax, personally against any responsible person, piercing the corporation or LLC.
When do I file Form 941 and Form 940?: Form 941 is the employer's quarterly federal tax return, where you report wages, withheld income tax, and both shares of FICA. It is due April 30, July 31, October 31, and January 31 for the four quarters. Form 940 is the annual FUTA return, due January 31 (you get until February 10 if you deposited all your FUTA tax on time). Very small employers whose annual employment tax runs $1,000 or less may be notified by the IRS to file the annual Form 944 instead of quarterly 941s, but you cannot choose it on your own, the IRS has to assign you to it in writing.
How often do I have to deposit payroll taxes?: Most new employers are monthly depositors: you deposit the income tax and FICA for a month by the 15th of the following month. Your schedule is set by a "lookback period," if you reported $50,000 or less in employment taxes during it, you deposit monthly; more than $50,000 makes you a semiweekly depositor. One rule overrides both: if you ever accumulate $100,000 or more of payroll tax liability on a single day, you must deposit it by the next business day. Deposits are made electronically through EFTPS, never by mailing a check with the return.
Do I owe Florida payroll tax if I have no state income tax to withhold?: Florida has no personal income tax, so there is nothing to withhold at the state level, which is a genuine advantage over most states. But you still owe Florida reemployment tax (the state's version of unemployment tax) once you become liable, generally after you pay $1,500 in wages in a calendar quarter or have an employee for any part of a day in 20 different weeks. The new-employer rate is 2.7% on the first $7,000 of each employee's annual wages, reported quarterly on Form RT-6. You also have to report every new hire to the state new-hire directory shortly after their start date.
Can I just pay my first worker as a 1099 contractor to avoid all of this?: Not if the facts make them an employee. Whether someone is an employee or an independent contractor is decided by how much control you have over their work, not by what you call them or whether they agreed to a 1099. If the IRS or the Florida Department of Revenue reclassifies a worker you treated as a contractor, you can be hit with the back payroll taxes you should have withheld and paid, plus penalties and interest, and the withheld portion can again become a personal liability. When it is a genuinely close call, it is worth getting a professional read before the first payment rather than after a reclassification.