Florida Payroll Tax: What Employers Need to Know

Payroll taxes encompass funds withheld from employee wages and direct contributions made by employers to various government agencies. For companies operating in Florida, understanding these responsibilities is important. This article outlines payroll tax requirements for businesses in Florida, covering federal and state obligations.

Understanding Federal Payroll Taxes

Employers in Florida are responsible for federal payroll taxes that support Social Security, Medicare, and unemployment benefits. These federal taxes, known as FICA taxes for Social Security and Medicare, and FUTA for unemployment, apply to all businesses.

Social Security and Medicare taxes, known as FICA taxes, fund retirement, disability, and hospital insurance programs. For 2025, the Social Security tax rate is 6.2% for both the employee and the employer, applied to wages up to a taxable wage base of $176,100. Medicare tax is 1.45% for both the employee and the employer, with no wage base limit. An additional Medicare tax of 0.9% applies to individual employee earnings exceeding $200,000, though employers do not match this additional tax.

The Federal Unemployment Tax Act (FUTA) imposes a tax on employers to fund unemployment benefits. For 2025, the FUTA tax rate is 6.0% on the first $7,000 of wages paid to each employee annually. Employers typically receive a credit of up to 5.4% for timely state unemployment tax payments, which can reduce the effective FUTA rate to 0.6%.

Florida Reemployment Tax

Florida imposes a state unemployment tax, known as the Reemployment Tax, which funds unemployment benefits for eligible workers. This tax is exclusively an employer-paid obligation, and businesses are prohibited from deducting it from employee wages. The funds collected are deposited into the Unemployment Compensation Trust Fund.

The Reemployment Tax is applied to the first $7,000 of wages paid to each employee by their employer in a calendar year, similar to the federal FUTA wage base. For new employers in Florida, the initial tax rate is 2.7%. This rate remains in effect for the first 10 quarters of operation.

After the initial period, an employer’s specific Reemployment Tax rate is determined by an experience rating, which considers the total benefits charged to the employer’s account relative to their taxable payroll. This system incentivizes stable employment records by potentially lowering tax rates for businesses with fewer unemployment claims. Florida’s Reemployment Tax rates can range from a minimum of 0.1% to a maximum of 5.4% for 2025. The Florida Department of Revenue (FDOR) administers this tax, including registration, collection, and rate assignment.

No Florida State Income Tax

Florida is one of a few states that does not impose a statewide individual income tax on wages. The absence of a state income tax distinguishes Florida from many other states where such withholding is a standard payroll obligation.

This simplifies payroll processing for Florida employers by eliminating a layer of state-specific income tax calculations and remittances. While federal income tax withholding remains a requirement, the lack of a corresponding state income tax simplifies compliance.

Employer Registration and Reporting

Compliance with payroll tax obligations involves several procedural steps for employers, including registration with relevant agencies and regular reporting and payment.

To comply with federal tax requirements, employers must obtain an Employer Identification Number (EIN) from the Internal Revenue Service (IRS). An EIN serves as a unique identifier for tax purposes. Businesses can apply for an EIN online, or by fax or mail using Form SS-4, “Application for Employer Identification Number.”

For Florida’s Reemployment Tax, employers must register with the Florida Department of Revenue (FDOR) to obtain a Reemployment Tax account number. This registration can be completed online through the FDOR’s portal. This account number is essential for filing state unemployment tax reports and making payments.

Federal reporting of payroll taxes involves several forms. Employers file Form 941, “Employer’s Quarterly Federal Tax Return,” each quarter to report withheld federal income tax, Social Security tax, and Medicare tax. This form is due by the last day of the month following the end of each calendar quarter (April 30, July 31, October 31, and January 31).

Employers also file Form 940, “Employer’s Annual Federal Unemployment (FUTA) Tax Return,” annually to report their federal unemployment tax liability. At year-end, employers issue Form W-2, “Wage and Tax Statement,” to employees and transmit copies with Form W-3, “Transmittal of Wage and Tax Statements,” to the Social Security Administration.

Federal payroll taxes are primarily paid through the Electronic Federal Tax Payment System (EFTPS). Employers can schedule payments in advance and manage their tax obligations securely online. The frequency of these payments, whether monthly or semi-weekly, depends on the employer’s total tax liability.

For state Reemployment Tax, employers in Florida submit Form RT-6, “Employer’s Quarterly Report,” to the FDOR. Reports and payments are due quarterly, by the last day of the month following the end of the quarter. Electronic filing and payment options are available and often required for larger employers.