Employer Payroll Taxes and Insurance ConEmployer Payroll Taxes and Insurance Contributions

Employer Payroll Taxes and Insurance Contributions

B1 If employer payroll taxes or contributions to government-sponsored insurance funds are assessed on an annual basis, the employer’s related expense is recognised in interim periods using an estimated average annual effective payroll tax or contribution rate, even though a large portion of the payments may be made early in the annual reporting period. A common example is an employer payroll tax or insurance contribution that is imposed up to a certain maximum level of earnings per employee. For higher income employees, the maximum income is reached before the end of each annual reporting period, and the employer makes no further payments through to the end of each annual reporting period.