Social Security has provided financial protection to people for over 80 years, and you probably have, or know someone who has received benefits from Social Security. This informative video explains the basic concept of the program designed to help workers and their families secure themselves against risks associated with getting older and loss of income due to retirement, death, disability or unemployment.
Staring on the Right Foot: Employers Social Security Responsibilities
Most people who pay into Social Security work for an employer, and the employer deducts Social Security taxes from their employee’s paycheck. That deduction is what the employee pays into the program. But, employers also pay for Social Security!
Workers pay 6.2% of their earnings up to a cap. Employers, including small business employers, pay a matching amount. Therefore, the combined contribution would be 12.4% of earnings. A self-employed person will pay both the employee and employer share. An additional tax of 1.45% on worker’s earnings pays for Medicare hospital insurance, just like the Social Security tax, employers pay a matching amount for a total of 2.9 percent. Again, self-employed people would pay 2.9 percent. The Social Security Administration has links to frequently asked questions. And the Small Business Administration clarifies the technical differences between an employee and independent contractor when you decide to start hiring as well as the required employee benefits. These of course include Social Security Taxes with helpful information to ensure that you comply with why and how to file as well as information on hiring employees not covered by social security.
For more direct assistance about employers and Social Security, the Dallas Regional Social Security Office also serves more than 700,000 employers in Arkansas, Louisiana, New Mexico, Oklahoma and Texas. Not only can you call or email the Employer Services Liaison Officer, their website has detailed information on annual wage reporting, electronic filing, Social Security Number Verification Service, Social Security Number Randomization and news for employers.
Looking for Inspiration
The Dallas Public Library has 28 branches with countless inspiring stories of small business owners. And, if reading the above government documents is not something you want to do in your free time, you may want to check out a book from Sammons Small Business Center written by business owners, like Boss Life: Surviving My Own Small Business, or Good Morning Beautiful Business: the unexpected journey of an activist entrepreneur and local economy pioneer.