Small businesses contribute a major share to the economy.
They employ a large number of people and pay about $750 billion to them annually. However, 28% of them do not pay Payroll taxes on time. They contribute to the $848 penalties for this delay.
Many changes have been made to the Payroll tax in the recent years. The social security tax contributions by the employee and the employer were made equal at 6.2%. Then the employees tax rate was cut down to 4.2%.
This cut in the tax rate has to be incorporated by the employers and submitted to the IRS before the end of December. However, the date has been extended to later part of January due to the high rate of defaulters.