How Much Are Payroll Taxes in Georgia?
Navigate payroll tax responsibilities for Georgia businesses. Get clear insights into federal and state frameworks, calculation principles, and compliance.
Payroll taxes are a mandatory financial obligation for businesses with employees, funding various government programs. These taxes are collected from both employers and employees, contributing to social support and insurance. Understanding payroll taxes is important for businesses in Georgia, as compliance involves adhering to both federal and state regulations. Proper management ensures accurate financial operations.
Federal Payroll Tax Components
Federal payroll taxes encompass several distinct components that employers nationwide, including those in Georgia, must account for. These taxes primarily fund Social Security, Medicare, and federal unemployment benefits.
Social Security tax (OASDI) provides benefits for retirees, disabled workers, and their survivors. For 2025, the Social Security tax rate is 6.2% for employees and a matching 6.2% for employers, totaling 12.4%. This tax applies to an employee’s wages up to an annual wage base limit, which is $176,100 for 2025. Wages earned above this limit are not subject to Social Security tax.
Medicare tax, or Hospital Insurance (HI), helps fund hospital insurance for the elderly and disabled. The Medicare tax rate is 1.45% for employees and a corresponding 1.45% for employers, making a combined rate of 2.9%. There is no wage base limit for Medicare tax. An additional Medicare Tax of 0.9% applies to individual employee wages exceeding $200,000, or $250,000 for married couples filing jointly. Employers withhold this additional tax from employee wages once the threshold is met.
The Federal Unemployment Tax Act (FUTA) provides funds for state unemployment agencies and benefits for eligible unemployed workers. This tax is paid solely by the employer at a rate of 6.0% on the first $7,000 of each employee’s wages annually. Employers receive a credit of up to 5.4% against the FUTA tax for timely contributions to state unemployment funds, reducing the effective FUTA tax rate for most employers to 0.6%.
Georgia Unemployment Insurance
Georgia’s State Unemployment Insurance (SUI) program provides temporary financial assistance to eligible workers who lose their jobs through no fault of their own. In Georgia, SUI is an employer-only tax.
The taxable wage base for Georgia SUI is $9,500 per employee per calendar year. New employers in Georgia are assigned a standard SUI tax rate for an initial period. In 2025, this new employer rate is 2.64%.
For established employers, the SUI rate is determined by an “experience rating” system. This system assesses an employer’s unemployment claims history. Employers with fewer claims generally receive lower tax rates. Georgia’s SUI rates for experienced employers can range from 0.04% to 8.1%. Employers can access their specific assigned rate through the Georgia Department of Labor Employer Portal.
Understanding Payroll Tax Calculations
Calculating payroll taxes involves applying the relevant rates and wage bases to employee earnings. For each pay period, employers determine amounts to be withheld from employee wages and their own direct contributions.
Employee withholding calculations begin with Social Security and Medicare taxes. The employee’s 6.2% Social Security tax applies to gross wages up to the annual wage base limit of $176,100. The employee’s 1.45% Medicare tax applies to all gross wages, as there is no wage base limit. An additional 0.9% Medicare tax is withheld from wages exceeding $200,000 (or $250,000 for married filing jointly). Federal income tax withholding is also calculated based on gross wages and employee information on Form W-4.
Employer contributions involve matching the employee’s Social Security and Medicare taxes. Employers pay 6.2% for Social Security on wages up to the $176,100 limit, and 1.45% for Medicare on all wages. Employers calculate their FUTA liability by applying the effective 0.6% rate to the first $7,000 of each employee’s wages. For Georgia SUI, employers apply their assigned state rate to the first $9,500 of each employee’s annual wages.
Payroll Tax Filing and Payment Requirements
Employers must adhere to federal and state guidelines for reporting and remitting payroll taxes. These procedures ensure collected funds are properly accounted for and transferred to government agencies. Timely and accurate filing avoids penalties.
For federal taxes, employers report income, Social Security, and Medicare taxes withheld, along with their own matching portions, on Form 941, Employer’s Quarterly Federal Tax Return. This form is due quarterly by the last day of the month following the end of each calendar quarter (April 30, July 31, October 31, and January 31). FUTA liabilities are reported annually on Form 940, Employer’s Annual Federal Unemployment Tax Return.
Federal tax deposits, including income tax withholding and FICA taxes, are generally made through the Electronic Federal Tax Payment System (EFTPS). The frequency of these deposits, either monthly or semi-weekly, depends on the employer’s total tax liability from a lookback period. For Georgia SUI, employers must file quarterly tax and wage reports and make corresponding payments to the Georgia Department of Labor (GDOL). These reports and payments are due by April 30, July 31, October 31, and January 31.
Beyond quarterly and annual reporting, employers are also responsible for annual wage and tax statements. Form W-2, Wage and Tax Statement, is provided to each employee by January 31 of the following year, detailing their wages and taxes withheld. Form W-3, Transmittal of Wage and Tax Statements, serves as a summary of all W-2 forms and is submitted to the Social Security Administration (SSA) along with Copy A of the W-2s.