Not affiliated with the US Social Security Administration
Employee Tax Deducted from Pay
1406.1 When are Social Security and Medicare taxes deducted from wages?
Social Security and Medicare taxes are deducted when wages are paid. (See §1408 for special rules on cash and charged tips).
1406.2 Are taxes deducted if you do not meet the minimum dollar test?
If an employer is not sure if an employee will meet the minimum dollar test for household employees (as explained in §915), for agricultural employees (as explained in §901), or for some homeworkers (as explained in §830), the employer may:
Deduct the tax when the payment is made; or
Wait until the test is met.
1406.3 How are taxes deducted for tips?
1406.4 If the employee does not meet the cash-pay test, what should the employer do?
If the employer collects the taxes and later finds that the employee does not meet the test, the employer must repay the Social Security taxes deducted to the employee. If the employer cannot locate the employee, the taxes should be sent to IRS.
Last Revised: Jul. 1, 2004
- Special Rules for Cash Tips After 1965
- Cash-Pay Tests
- What types of income count under the earnings test?
- Statements of Earnings for Employees
- The Extent of Social Security Coverage
- Social Security and Medicare Tax Rates
- Employment Not In The Course Of The Employer's Trade Or Business
- The Common-Law Test
- Domestic Service in Private Home of Employer
- Pay for Work for Nonprofit Organization
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