The Complete State Of Florida Payroll & Payroll Taxes Guide

Though Florida’s state and local governments don’t take anything directly out of employees’ incomes, employees still need to pay income taxes to the Federal government. Federal income taxes can fall anywhere from 0% – 37% depending on your employees’ withholding selections.

Florida is an estate tax haven for retirees, veterans, investors, and everyone across the board. Neither the state nor local governments partake of the proceeds from willed or inherited properties.

People in Florida aren’t obliged to pay taxes on intangible goods, from assets to investments, services, etc.

Floridians are required to pay a 6% sales tax on all tangible goods that are sold or rented. However, groceries, medicines, and a number of other commodities are exempted. Also, most Florida counties charge their own sales taxes.

Certain industries can have slightly different sales tax rates, so the Florida Department of Revenue is the best place to get the most detailed sales tax rates.

Although it applies to all taxable items bought in Florida, use tax is an extension of state sales tax mainly designed to charge people for out-of-state online purchases. You won’t need to consider this tax in your payroll management because your employees are obliged to report the purchases and pay the applicable use taxes personally.

Property taxes in Florida are mostly charged by local governments, but they’re some of the highest in the country. However, there’s a long list of categories of people who are exempt from Florida’s property taxes.

You also need to keep FICA taxes in mind, which comprise a 6.2% social security tax on annual incomes below $147,000 per year and a 1.45% Medicare Tax on annual incomes below $200,000. Employers are mandated to match these deductions.

Employers are also obliged to pay 6% of the first $7,000 of an employee’s taxable income as FUTA unemployment taxes, but they can get a tax credit of up to 5.4% if they’re paying state unemployment taxes.

Besides federal and state taxes, you also need to factor in court-ordered wage garnishments, child support, contributions to post-tax savings accounts like Flexible Spending Account (FSA), 401(k), etc., if applicable to an employee.

It’s your obligation as an employer to make these deductions from your employee’s paychecks and turn them into the proper authorities on your employee’s behalf.

Florida’s voters recently passed Amendment 2, which increased Floridas’s minimum wage to $12.00/hour and will continue to increase the minimum wage incrementally until it reaches $15.00/hour, which is almost double the federal minimum wage of $7.25/hour.

The Florida state rate for tipped employees, which is $8.98/hour. This makes a huge difference since you’ll need to make up for a relatively big difference in the tipped employees’ weekly pay. It’s your obligation to cover whatever amount is needed to make up for the minimum wage, in addition to the tips.

You also need to keep in mind that you’re mandated by law to display a Florida minimum wage poster conspicuously within your workplace. You also need to openly display the Florida Reemployment Assistance notice with details of eligibility requirements for unemployment assistance in your workplace.

Also known as unemployment taxes, reemployment taxes are charged on employers towards the unemployment benefits of their employees. The rate for new businesses is 2.7% for the first $7,000 earned by the employee. After the first 10 quarters of existence, a new business’ reemployment rate can fall anywhere from 0.10% to 5.4% per new employee. People taking over an existing business will be subjected to the previous owner’s rate.

In addition, employers are also obliged to pay federal reemployment taxes, though they may be eligible for tax breaks of up to 5.4%.

You’re required by both federal and state laws to report new hires and rehires to the Florida New Hire Reporting Center within 20 days from their assumption date. You may be fined up to $25 per employee for neglecting to report them or up to $500 per new employee if you intentionally failed to report them. You might even be fined for not reporting yourself; you need to report yourself if you’re self-employed.

Hiring laws currently prevailing in Florida also prohibit the consideration of several factors in the hiring process. These include race, color, religion, sex, age, country of origin, and health conditions such as AIDs, sickle cell, genetic conditions, etc.

Paid Time Off (PTO) tracking in payroll management is easier for business owners in Florida because it’s possible to void all outstanding PTO expenses at the turn of a new year. Florida law also allows you to forgo paying out outstanding PTO at termination or rolling them over from year to year.

However, many businesses in Florida offer their employees PTO for several reasons ranging from holiday time to jury duty, voting leave, and bereavement leave. You don’t necessarily have to offer PTO for all these reasons; you can use your discretion to determine the circumstances under which your employees will be paid for hours they haven’t worked.

The state law stipulates a mandatory meal break for minor employees younger than 18 years, while it defers to federal labor laws for the regulation of mealtime for adult employees. Employers are not required by federal law to provide meal breaks for adult employees. Those who provide meal breaks lasting less than 20 minutes are required to pay for the period, but break periods lasting 30 minutes or longer can go unpaid, provided the employees are allowed to do as they please during that period.

Overtime regulations are also up to federal labor laws. But no laws across any level require employers to pay for any leave, including sick leave, holiday leave, jury duty leave, voting leave, and bereavement leave. Employers are also not obliged by any laws to provide severance pay at termination, though they will be held liable for the severance terms stipulated in their employment contracts and policies.

Federal law permits minors to work for any number of hours provided they’re 16 years and older. However, Florida’s state laws are a lot more intricate. Minors under the age of 14 are not eligible to work except under rare circumstances; minors aged 16 and older aren’t allowed to work for more than 30 hours a week and their working hours must not fall within school hours (except when engaged in career education programs) or at times earlier than 6.30 a.m. or later than 11.30 p.m. Minors under 16 cannot work for more than eight hours during a school day or for more than six consecutive days in a week. State laws also prohibit minors from working in hazardous occupations.

Although employers are not required by any law in Florida to pay their employees within a certain period, they’re still mandated to schedule regular paydays. In other words, they need to pay their employees consistently. Once you choose a payroll schedule, you must stick to the frequency of the payment at all times.

Another payment obligation employers in Florida need to be aware of is the final check issued to terminated employees. Although employers are not subjected to severance pay laws, it’s always advisable to pay off any outstanding monies owed to terminated employees promptly to avoid legal disputes that might take up time and money.

Employers are also liable to pay reemployment fees to both the state and federal government if they hire at least one employee for a day, have a quarterly payroll of at least $1,500, or pay no local taxes.

You’re also responsible for paying garnishments to the proper authorities on behalf of your employees as an employer in Florida. A garnishment is a court order or an IRS levy directing an employer to withhold a certain amount of an employee’s wages for debt repayment. But it doesn’t apply to an employee with a weekly income of $500 who is supporting a household.

No laws in Florida impose disability taxes on employers. But you can still opt to provide disability insurance for your employees who may be out of work due to non-work-related accidents or illnesses or who may not be qualified for worker’s compensation.

Note, however, that group disability insurance policies with specific provisions sold by insurers are subject to certain state laws.

Employees working in various occupations in Florida also enjoy institutional access to insurance coverage for work-related accidents and illnesses. Employers in certain fields must run worker’s compensation insurance for all their employees in Florida, with the cost of each policy determined by factors like the nature of the occupation and the claim history of the business. Minimum level plans are required for construction companies with at least one employee, non-construction companies with a minimum of four employers (including part-time, full-time, corporate and LLC staff), and agricultural businesses with at least six part-time and/or at least 12 part-time employees.

Subcontractors are also required to provide coverage if they’ve hired at least one employee for at least 30 days. Businesses issuing the contracts are also obliged to check for the subcontractor’s compliance with this coverage.

Nonetheless, certain categories of business owners are exempted from workers’ compensation requirements. You have the liberty to decline to offer workers’ compensation if you’re a corporate officer, sole proprietor, or a partner working with non-construction companies.

Florida-based businesses have to pay federal payroll taxes like FICA and FUTA, as well as Florida sales and property taxes.

Florida does not have a personal income tax. Income tax in Florida follows the federal income tax regulations.

Florida has a minimum wage of $10/hour or $6.98/hour for tipped employees. However, the minimum wage will be increasing incrementally to $15.00/hour as voted on in the 2020 election.

Because Florida’s minimum wage is higher than the federal minimum wage for both hourly employees and tipped employees, business will need to pay the Florida minimum wage requirements.