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Question: Start Up Business Trying to Understand Taxes?

So my family has owned a small bakery for about 30 years. Without going into too much detail we have established a new business, a bakery that is incorporated. The ownership will be changing hands to me soon and I have some tax questions to go over. Of course I will be going over all of this in detail with my accountant, however I would like to discuss this with some knowledgeable folks ahead of time.

So heres my question. Our business is in michigan, and we have around 10 employees. Each employee earns $10 per hour. How much can I expect to pay weekly in payroll taxes (unemployment, workers comp, etc) if each employee works 30 hours per week, totaling $3,000 in weekly labor. ? I understand that there are many variables here, just trying to figure out some rough estimates.

I am confused on what the EMPLOYER pays in taxes related to running an incorporated business in michigan. I know I have a lot to learn, so im just starting with the basics. Thanks for the help!

Answer: The employer pays unemployment tax, and one-half of the employee’s social security taxes.

The other taxes are paid by the employee, but you’re responsible for collecting them. (You’ll show them as deductions from gross pay on the pay stub), and then you’ll be responsible for forwarding that money to the taxing authorities. Usually your bank or financial institution can accept the payment on your behalf.

I would STRONGLY recommend that you get yourself a CPA who can help you set this all up. A CPA licensed to practice in Michigan will be able to give you a much more accurate picture of what it will cost you to have employees than will anyone here on Yahoo! Answers.

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