Employee Taxes

All companies with employees are required to participate in the following employee tax programs.

Federal & State Income Tax Withholding

All employers are required to withhold income taxes from their employees’ wages for both the federal and state government. To know how much income tax to withhold from employees' wages, you should have all new employees complete the appropriate forms:
  • Form W-4, Employee Withholding Allowance Certificate for Federal Withholding
  • R-1300 - Employee Withholding Exemption Certificate (L- 4) for State Withholding

Social Security & Medicare Taxes

By federal law, all employers must withhold Social Security and Medicare taxes from an employee’s gross wages (7.65% up to a certain amount, 1.45% thereafter). The employer must also pay an equal amount for this tax. Depositing procedures vary depending upon the total amount an employer withholds from all employees. Current information on amounts to withhold, as well as up-to-date employee income tax withholding taxes may be found in the IRS publication entitled Circular E - Employer’s Tax Guide.

Unemployment Compensation

With a few exceptions, all businesses with employees must pay federal and state unemployment taxes. The tax is the business owner’s responsibility; it is illegal to deduct this tax from an employee’s wages. For information on Louisiana unemployment compensation matters, contact:
Louisiana Department of Labor
Unemployment Insurance Field Audit Office
2900 Dowdell
Shreveport, LA 71103

You may also call 318-676-7703. For federal information, the IRS publication, Circular E - Employer’s Tax Guide, provides information on filing with the federal government.

Federal Unemployment (FUTA) Tax

The Federal Unemployment Tax Act (FUTA), with state unemployment systems, provides for payments of unemployment compensation to workers who have lost their jobs. Most employers pay both a federal and a state unemployment tax. A list of state unemployment tax agencies, including addresses and phone numbers, is available in Pub. 926, Household Employer's Tax Guide. Only the employer pays FUTA tax; it is not deducted from the employee's wages. For more information, see the Instructions for Form 940.

Workers’ Compensation

State law mandates that all employers must provide workers’ compensation insurance for their employees. Rates vary depending upon employee classifications. For more information, contact the Workers’ Compensation Division, Louisiana Department of Labor, Northern Division, at 318-676-5531.

Note: you can download the Employer Handbook, Business Owner’s Manual outlining requirements pertaining to the state unemployment and workers' compensation programs.