Hi ,
More Importantly there is form called W4 ( Employees Tax withholding Excemption certificate).
At the time of New hire it is employers obligation to get this form filled and deduct the taxes accordingly in receptive pay roll periods.
Federal Tax Withholding ---2010
Federal Income Tax Withholding :--
Employers are required to withhold federal income tax from the
wages paid to employees. The withheld amount is credited to the
employees’ individual income taxes.
The amount of federal income tax withheld depends on five factors:
1. Payroll period,
2. Employee marital status,
3. Amount of wages,
4. Number of withholding allowances claimed by the employee, and
5. Additional amounts the employee requests to be withheld.
Each employee should be provided with a Form W-4 to claim the
appropriate number of withholding allowances and identify marital
status. The signed Form W-4 must be kept on file for each employee.
If an employee does not complete a Form W-4, the employer is
required to withhold tax as if the employee were a single person
claiming no withholding allowances. If not enough tax is withheld,
the employee may be subject to penalties.
Federal Unemployment Tax Act (FUTA)
The Federal Unemployment Tax Act (FUTA) provides a federal-state
insurance system for workers who lose their jobs.
Social Security and Medicare Tax Rates and Limits :--
Old-Age, Survivors and Disability Insurance (OASDI)
SSWB (Social Security wage Board)