thread Re: why does the IRS charge so much to run payroll? in Staff & Payroll

why does the IRS charge so much to run payroll?

onyxnailbar1 — Sun, 21 Sep 2025 06:48:34 GMT

why does the IRS charge so much to run payroll? am I missing something.

Re: why does the IRS charge so much to run payroll?

ryanwanner — Tue, 19 Apr 2022 22:39:50 GMT

Hello @onyxnailbar1 !

Sadly, no, you're not missing anything at all. Payroll taxes are horribly high IMO.

The thing that throws most operators off is how much these taxes can eat into your operating costs:

Here is my payroll report from last week. 18% went to the IRS. The other 102 went to Colorado. UGHHHH.

How I explain it to my employees: that section of your check where you see the taxes taken out? We have to pay that TWICE OVER to the gov. This is the main reason that I'm such a stickler about people riding my clock and why I play a serious scheduling juggle every week.

And the worst part is the IRS knows they have us operators over a barrel: we don't pay, they shut us down and seize our assets. Simple as that.

Hate to be the bearer of bad news! 😞

Re: why does the IRS charge so much to run payroll?

KatM — Thu, 05 May 2022 21:58:37 GMT

I am confused by your question. The IRS does not "charge" you to "run" payroll.

Have you not been an employee somewhere before that withheld taxes from your check?

You (as an employer) have to pay the IRS the amounts that you withhold from the employee's check for THEIR income tax (amount is based on how they complete their W-4 form for exemptions), and FICA (which funds their future medicare and social security) 7.65% is withheld from the employee and you have to Match that amount into the fund. The only amount you are actually "being charged" is 7.65% matching FICA. There is also FUTA tax, that comes out of your pocket, for the federal unemployment fund.

I look at the amounts that I have to pay in as supporting my employee's future. I appreciate what my employees do for me and am happy to contribute to their well-being.