Hi, My employer is asking me to pay the payroll tax, How to calculate the payroll tax?

I am working as a contractor and now negotiating with my employer to pay me on percentage basis. On this he is asking me to pay the tax(payroll tax) to run the paychex.
He is asking me 10% of the earning against this payroll tax and I am bit confused that this tax is really this high?
Thanks in advance for helping !!

I will ask this question in a different way. What is the employer's share of tax on my earnings? My taxes are already been deducted in the paychex which is around 26% of my income. Does employer also pay tax on the same amount which is as high as 8-10% in NJ?

You need to speak to an accountant or a tax person. I'm pretty sure you're not supposed to be the one to pay that. You can also try getting some tax or payroll software that's for small businesses, because you'll need to have this info and a lot more if you're going to be in business for yourself. Quicken has good stuff, and you can download a lot of it instead of going to the store.

Also, if you're part of a union, they may hove some resources for you there that are specific to what you do, or even be able to have someone sit down with you to go over it all.

Hi i have no clue what you are talking about (try english=)

It's really low!

The amount of taxes you pay depends on your income bracket level and also your claim status.

Typical range is between 10-30%.

You are an independent contractor, which typically means that the employer will not deduct taxes out of your check and that it is your responsibility to do so yearly.

I would contact your employer and find out what this tax they are wanting is for. You should NOT have to pay taxes simply so they can cut you a check.

I would also talk with a Tax advisor-- HR Block or similar to determine what your employer is trying to do.

contact your local IRS office and ask them. your employer maybe a li'l bit fishie on this. There's a law guiding this. Don't wait...

This does not sound right as payroll taxes are set by the state and are law imposed units of %. Call the business office of the state tax in your state. It seems that any profit made as an independent contractror should be yours. If you are still working for the employer they must calculate the tax.
Spartawo...

Obviously, as your employer owns the business, he has a lot more on the ball than you do relative to payroll and taxes...

He may tell you he has a $20,000 job and you may think getting 10% of that to be good pay... Well, it may not be so good either because he bids the job based partly on payroll expenses and including taxes as well.

What exactly are what he calls payroll taxes, you do not say...? There are several witholding taxes shown on your pay stub...look at them and you will know... Your employer deducts taxes using a chart of wage escalation...earn more, pay more...! All payroll taxes combined average no less than 18% and usually are more depending upon the state and city and county you live in and the same for where the company office is...

Some of the taxes he now pays 7% as his share and you Pay 7% for your share... There are several taxes to be paid and all are labeled as a payroll tax...

As you appear to know so little, my suggestion is that you abort this idea as you will never have access to the real dollar bid of a contracted job to begin with... No employer will give you those exact figures...that is why he is the boss and you are the employee...! Beware...!

You would do much better for yourself to ask for a bonus percentage for jobs completed on time or earlier than estimated, I am sure...

Keep in mind also that he does the bidding and if he underbids a job he certainly cannot pay a bonus and you may well go home with less pay than you do now if simply on a 10% wage factor...

Do some research locally and ask some friends in your type of contractor work and you will get some sound answers...

Good luck...

You are the third clueless independent contractor today to post the basically identical question.

This is my canned explanation to clueless independent contractors which I cut and paste on an ongoing basis:

Some employers try to get around paying employment taxes (social security and unemployment) and other employee benefits like workers compensation insurance by improperly classifying employees as independent contractors. If you are required to show up for work--personally--at a particular time, punch the clock, use the employers equipment and are paid an hourly rate, you are an employee. If you didn't understand the difference when you posed your question, I would be even more convinced that you are an employee. What is your preference, Slotted or Phillips? Complete an IRS Form SS-8 to get an official ruling on your status. This will help you get unemployment if you get fired.