How to set up a payroll for my small business?

Payroll taxes are federal, state, and local taxes withheld from an employee’s paycheck by the employer. They include Income Tax, Social Security, Medicare, and some state-specific taxes. In order to properly calculate what your payroll tax should be, you need to know the current tax rates. For example, the Social Security tax for 2020 is 6.2% and the Medicare tax rate is 1.45%. The percentages are determined on a yearly basis.