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Updated: April 6, 2023
Whether you cook up the best clam chowder in the Cape or build sturdy fireplaces for your customers to cozy up against on a cold winter’s day, you know all the ins and outs of your small business. But most of all, as a Massachusetts small business owner, you know, come payday, you want your employees to be chanting, “We love working for you!” as opposed to “No taxation without representation!” Or something like that.
Maybe we’re thinking of something else, but our point remains the same: one of the most important things to know as a small business owner is paying your employees correctly for the hard work they’ve done. Luckily, we are here to help. All you have to do is grab their W-4 and their wage information. Our calculator will do the rest of the work for you.
Let’s go over federal payroll taxes first, shall we? Our handy payroll calculator will help you figure out the federal payroll tax withholding for both your employees and your business.
We’ve organized federal income taxes into a 6-step overview. If you would like to see a more detailed explanation, we invite you to check out our step-by-step guide here.
Income taxes in Massachusetts run at a flat rate of 5% for the 2023 tax year, which means that regardless of whether your employee makes a hundred dollars or a hundred thousand, the tax rate remains the same.
On the first $15,000 each employee earns, Massachusetts employers also pay unemployment insurance of between 0.56% and 8.62%. New employers pay 2.42%, and new construction employers pay 7.37% for 2023.
Employers also have to pay a Work Force Training Contribution of 0.056%, and a Health Insurance Contribution of 5%.
You’ve done it! You’ve figured out all your payroll! Now you’re ready to cut some checks.
Don’t forget to set aside the employer taxes your company is responsible for. Those FICA, FUTA, and SUI payments can add up if you don’t remit them quarterly. And remember, you want to get that FUTA tax credit of 5.4%, so you definitely should pay your SUI on time.
Federal tax filings are due quarterly by filing Form 941. FUTA payments are due quarterly, but you just have to fill out Form 940 once a year. You can pay taxes on an ongoing basis via the EFTPS payment system. Employment tax due dates can be found here.
Withholding Taxes | Unemployment Insurance for New Employers | Unemployment Insurance Explained | File and Pay Online | Income Tax Withholding
These rates are based on local legislation and can change at any time. Always consult a tax professional if you are unsure about your obligations.
Massachusetts employers can quickly calculate their employees’ gross pay, net pay, and deductions using the free calculator at the top of this page (and feel confident when cutting paychecks). But every now and then, employers may have situations that need a little more number crunching. For example, do your best-performing employees get bonuses from time to time? Remember that Uncle Sam considers this type of payment to be supplemental wages and requires taxes to be withheld. Also, if you have workers who come and go, you may need to figure out how much their final paycheck will be. So, if you need more help adding up the numbers, one of our other calculators below might come in handy.
Try OnPay out yourself to see how easy payroll and HR can be. To get started, just share a few basic details about your business. Our team of pros will set everything up and import your employees’ information for you.