Final answer:
There are multiple employer payment options for payroll frequency, including weekly to monthly. Payroll taxes are typically split between the employer and employee, impacting take-home pay. Independent contractors must pay both portions of payroll taxes, unlike regular employees.
Step-by-step explanation:
Employers have several employer payment options when determining how often to pay their employees. These frequencies can range from weekly, bi-weekly, semi-monthly, to monthly payments. Each option has its own implications for both the employer and the employee. Paying employees involves not just the gross wages but also includes deductions for various benefits and taxes.
It is important to remember that whenever an employer pays their employee, payroll taxes are generally split between the employer and the employee. From the employee's paycheck, 6.2% is commonly deducted for Social Security and another 1.45% for Medicare. Furthermore, additional employee benefits like health insurance, retirement plans, and unemployment insurance may also impact the total compensation.
When employees complete a W-4 form at the beginning of their employment, they influence the amount of tax withheld from each paycheck. Independent contractors, who often receive a 1099 tax statement, are responsible for paying both the employee and employer parts of payroll taxes themselves. This difference in tax responsibility is key for understanding the financial relationship between employer payment options and employee net income.