State
Income Tax
Along with Federal and FICA
taxes, employers must also consider state
income tax when calculating
payroll. However, this is quite time consuming
because of all the variables associated. For
example, some states have progressive income
taxes, while others have flat taxes. Also,
the percentages in each state vary. For a
company that extends over multiple states,
calculating state income tax is especially
difficult.
A PEO can help you and your company not only
with state income tax, but also with payroll
in general. Along with calculating all applicable
taxes, a good PEO stays completely current
on any and all changes in taxes, as well as
different state rates. When choosing a PEO,
be sure that they have experience with state
income tax in your state in particular, as
some PEOs are specific to one state. They
should be able to provide you with some references
you can consult if you so choose.
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