Most states require employers to withhold state income tax from employees’ paychecks, but Florida does not. Still, employees in Florida are subject to federal income tax, Social Security tax and Medicare tax withholding, which the Internal Revenue Service oversees. These taxes are based on a certain percentage of your pay.
While Florida doesn't have a state tax, residents still have to pay federal income, social security and medicare taxes. Each requires a different percentage of your total paycheck.
Federal Income Tax
Federal income tax withholding is based on a percentage of wages over a specific amount. To determine the amount subject to withholding, your employer obtains your filing status and number of allowances from lines 3 and 5 of your W-4 form and applies the IRS Circular E percentage method table that matches your wages after allowances, plus your pay period and filing status. Based on this information, you are taxed on 10, 12, 24, 32, 35 or 37 percent of wages exceeding the indicated amount. To determine the amount of allowance to subtract from your wages, your employer multiplies your number of allowances by the amount the agency specifies per allowance, which is based on your payroll frequency.
As of 2018, Medicare tax is based on 1.45 percent of all of your wages. Therefore, if you earn $460 weekly, you pay $6.67 weekly in Medicare tax. Your employer pays a matching amount in Medicare tax. If you are self-employed, you'll need to set aside 2.9 percent of your income to cover this tax.
Social Security Tax
As of 2018, Social Security tax is on wages of up to $128,400. While Medicare is withheld from all wages earned, Social Security withholding stops for the year when you satisfy the annual wage limit and resumes when the next year begins. Your employer pays 6.2 percent up to $128,400 for the year in Social Security tax. As of June 2018, the employee's contribution is also 6.2 percent. Those who are considered self-employed will be responsible for paying both the employee and employer percentages for a total of 12.4 percent.
Employee tax rates are generally updated yearly; therefore, for accurate calculation, consult the Circular E for the tax year in question. The Circular E has all federal tax rates. It also includes withholding payment and reporting schedules that your employer must follow. As an employee in Florida, you do not have to file a state income tax return with the Florida Department of Revenue because you are not subject to the tax. However, if you receive a W-2, you must file a federal tax return with the IRS.
- IRS.gov: W-4 Form
- IRS.gov: Circular E
- Social Security Administration: Contribution and Benefit Base
- IRS.gov: Topic No. 751 Social Security and Medicare Withholding Rates
- Smart Asset: Florida Paycheck Calculator
- IRS. "FAQs on the 2020 Form W-4." Accessed Oct. 16, 2020.
- IRS. "Tax Withholding for Individuals." Accessed Oct. 16, 2020.
- IRS. "Topic No. 753 Form W-4—Employee's Withholding Allowance Certificate." Accessed Oct. 16, 2020.
- Social Security Administration. "Fact Sheet Social Security." Accessed Oct. 16, 2020.
- Social Security Administration. "Contribution And Benefit Base." Accessed Oct. 16, 2020.
- IRS. "Topic No. 608 Excess Social Security and RRTA Tax Withheld." Accessed Oct. 16, 2020.
- IRS. "Publication 531 (2019), Reporting Tip Income." Accessed Oct. 16, 2020.
- IRS. "Group-Term Life Insurance." Accessed Oct. 16, 2020.
- IRS. "Questions and Answers for the Additional Medicare Tax." Accessed Oct. 16, 2020.
Grace Ferguson has been writing professionally since 2009. With 10 years of experience in employee benefits and payroll administration, Ferguson has written extensively on topics relating to employment and finance. A research writer as well, she has been published in The Sage Encyclopedia and Mission Bell Media.