5 ms·

No. The people they employ pay the payroll taxes out of their salary. No company pays payroll taxes for their employees.

pb7 5y ago
Businesses pay the same amount in payroll taxes as employees do. Self employed people pay double the payroll taxes.
- prepend 5y ago
  Technically, self employed people pay less than double because they can deduct the employer contribution. So I think it’s like 12.4% for self-employed vs, 7.5% for just an employee.
Zelphyr 5y ago
"There are a variety of payroll taxes, some paid by employers, some by employees, and some by both." https://www.paychex.com/articles/payroll-taxes/employers-guide-to-payroll-taxes https://www.paychex.com/articles/payroll-taxes/employers-gui...
lordnacho 5y ago
This is more complicated than you make it out to be. The person who literally sends the money according to the law is not the same as the one who pays in the economic sense. For instance, you could transfer the legal obligation to the other party, but that would change the negotiating position between the employer and the employee. Similarly, you can add a sales tax to some product, and make the company that sells the product collect it and forward it to the government, but that doesn't mean that the company is worse off the that amount. The pie is split according to some negotiating position.
- lr4444lr 5y ago
  Not really. Firms hire based on the cost of an employee. If suddenly the employer portion of the payroll tax disappeared, there would immediately be an incentive to funnel those funds into the salary to make job offerings stand out against what the employee's other options would be. Sure, some firms would pocket it, but it beggars belief that most of them would, when they've already made a decision to open a hiring line based on the funds available and projected revenue.
  - lordnacho 5y ago
    > If suddenly the employer portion of the payroll tax disappeared... That's what I'm saying. The piece that's added or removed is negotiated over, it doesn't just belong to whoever has their name on it.

pb7 5y ago

Businesses pay the same amount in payroll taxes as employees do. Self employed people pay double the payroll taxes.

prepend 5y ago
Technically, self employed people pay less than double because they can deduct the employer contribution. So I think it’s like 12.4% for self-employed vs, 7.5% for just an employee.

Zelphyr 5y ago

"There are a variety of payroll taxes, some paid by employers, some by employees, and some by both." https://www.paychex.com/articles/payroll-taxes/employers-guide-to-payroll-taxes https://www.paychex.com/articles/payroll-taxes/employers-gui...

lordnacho 5y ago

This is more complicated than you make it out to be. The person who literally sends the money according to the law is not the same as the one who pays in the economic sense. For instance, you could transfer the legal obligation to the other party, but that would change the negotiating position between the employer and the employee. Similarly, you can add a sales tax to some product, and make the company that sells the product collect it and forward it to the government, but that doesn't mean that the company is worse off the that amount. The pie is split according to some negotiating position.

lr4444lr 5y ago
Not really. Firms hire based on the cost of an employee. If suddenly the employer portion of the payroll tax disappeared, there would immediately be an incentive to funnel those funds into the salary to make job offerings stand out against what the employee's other options would be. Sure, some firms would pocket it, but it beggars belief that most of them would, when they've already made a decision to open a hiring line based on the funds available and projected revenue.
- lordnacho 5y ago
  > If suddenly the employer portion of the payroll tax disappeared... That's what I'm saying. The piece that's added or removed is negotiated over, it doesn't just belong to whoever has their name on it.