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What do I need to know about payroll?

Employers have many payroll-related obligations, including compensating employees for time worked. How often employees are paid is generally determined by state statute. Popular frequencies include weekly and monthly.

Where permitted, employers may elect to (or may be required to) pay employees using a mixed pay frequency. That is, some employees could be paid weekly, and others monthly.

You and your employees contribute to payroll taxes. Payroll taxes comprise both federal and state taxes, and depending on where you live, you may have to pay local payroll taxes, too.

Taxes are levied any time an employee is paid—wages, overtime, vacation pay, sick pay, tips, bonuses, commissions, taxable fringe benefits and other forms of compensation. You don't have to contribute to a contractor's payroll taxes, but the government has strict regulations about the types of workers that can be considered contractors.

Up next How do I differentiate between employees and contractors?

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