If you run payroll in Sarasota, Florida, your employee payroll tax requirements come from two levels of government: the federal government takes income tax withholding, Social Security, Medicare, and federal unemployment tax, and the state takes Florida reemployment tax. Neither Sarasota County nor the City of Sarasota adds a local payroll tax. Florida has no state income tax, so there is nothing to withhold at the state level either. That makes the Sarasota picture simpler than most states, but the federal obligations and the state reemployment tax still have to be registered, deposited, reported, and filed on precise schedules.
What You Withhold From Each Paycheck
Three things come out of the employee’s gross pay before they see it.
Federal income tax withholding is first. The amount is set by the employee’s Form W-4 (filing status, dependents, any extra withholding they request) and your pay-period tables.1Office of the Law Revision Counsel. 26 USC 3402 – Income Tax Collected at Source
Then the employee share of FICA: 6.2% for Social Security and 1.45% for Medicare.2Office of the Law Revision Counsel. 26 USC 3101 – Rate of Tax Social Security withholding stops once the employee’s year-to-date wages pass the Social Security wage base, which is $184,500 for 2026.3Social Security Administration. Contribution and Benefit Base Medicare has no cap and keeps coming out of every paycheck all year.
If an employee’s wages pass $200,000 in a calendar year, you must withhold an extra 0.9% Additional Medicare Tax on everything above that threshold. The $200,000 trigger is the same regardless of the employee’s filing status, and there is no employer match on this one.4Internal Revenue Service. Questions and Answers for the Additional Medicare Tax
What You Pay On Top Of Wages
Your own obligations run alongside what you withhold.
You match the employee FICA dollar for dollar: 6.2% Social Security up to the same $184,500 wage base, and 1.45% Medicare on all wages.5Office of the Law Revision Counsel. 26 USC 3111 – Rate of Tax Combined employer and employee FICA runs 15.3% on each covered dollar.
Federal unemployment tax (FUTA) is yours alone. Never withhold it. The statutory rate is 6.0% on the first $7,000 of each employee’s annual wages, but paying your Florida reemployment tax in full and on time earns a 5.4% credit, dropping the effective FUTA rate to 0.6% — a maximum of $42 per employee per year.6Internal Revenue Service. Publication 15 (Circular E), Employer’s Tax Guide Florida is not currently a credit reduction state, so Sarasota employers who stay current get the full credit.
Florida reemployment tax is the state unemployment system, and it is also entirely an employer cost. You cannot deduct it from an employee’s wages.7Florida Department of Revenue. Florida Reemployment Tax It applies only to the first $7,000 you pay each employee per calendar year. New employers pay 2.7% for their first ten quarters of reporting, after which the rate shifts based on your experience rating — essentially, how many of your former employees have drawn benefits.8Florida Department of Revenue. Reemployment Tax Rate Information You become liable once you pay $1,500 in wages in any calendar quarter, or employ at least one worker for any part of a day in each of 20 different calendar weeks in the year.
Deposit Schedules and Late-Deposit Penalties
Withheld federal income tax and both halves of FICA get deposited through the Electronic Federal Tax Payment System (EFTPS) on either a monthly or semi-weekly schedule, depending on your payroll size. FUTA gets deposited by the last day of the month after a quarter in which your accumulated liability passed $500.
Miss a federal deposit and the penalty ladder climbs fast: 2% for deposits one to five days late, 5% for six to fifteen days late, 10% past fifteen days, and 15% once the IRS has issued a formal notice demanding payment.9Internal Revenue Service. Failure to Deposit Penalty The percentages apply to the unpaid deposit and don’t stack. Automating the deposit calendar is cheap insurance.
Quarterly and Annual Filings
Three returns carry most of the reporting load.
Form 941, the Employer’s Quarterly Federal Tax Return, reports federal income tax withheld plus both sides of FICA. Despite the “annual-sounding” name, it is filed four times a year: by April 30, July 31, October 31, and January 31.10Internal Revenue Service. Employment Tax Due Dates
Form 940 reports FUTA and is filed once a year, due January 31 for the prior calendar year.
Florida reemployment tax is reported on Form RT-6, the Employer’s Quarterly Report, due on the same quarterly schedule as Form 941: April 30, July 31, October 31, and January 31.7Florida Department of Revenue. Florida Reemployment Tax File even if you had no employees or paid no wages that quarter. The Florida Department of Revenue’s e-Services portal calculates the tax from the wage detail you enter and takes payment by ACH debit; employers who don’t file electronically are mailed a paper RT-6 each quarter.11Florida Department of Revenue. Reemployment Tax Return and Payment Information A late RT-6 draws a $25 penalty for every 30 days or fraction of 30 days it stays delinquent, plus interest, and unpaid balances can lead to liens on business assets.12The Florida Legislature. Florida Code 443 – Reemployment Assistance, Section 443.141
What To Set Up Before Your First Payroll
Get a Federal Employer Identification Number (EIN) from the IRS. You can apply online and receive the nine-digit number immediately.13Internal Revenue Service. Employer Identification Number It appears on every federal filing, deposit, and piece of correspondence after that.
Register for Florida reemployment tax using the Florida Business Tax Application, Form DR-1, through the Department of Revenue’s online portal or on paper. You need the EIN to complete the registration.14Florida Department of Revenue. Florida Business Tax Application
Report every new employee to the Florida New Hire Reporting Center within 20 days of their start date, including name, address, Social Security number, and the date they first performed work for pay. The state uses this data primarily for child support enforcement and to catch fraudulent benefit claims.
Complete Form I-9 for each new hire to verify employment eligibility, and keep each one for three years after the hire date or one year after employment ends, whichever is later.15USCIS. I-9, Employment Eligibility Verification For broader payroll records, the Fair Labor Standards Act requires at least three years of retention for payroll ledgers and two years for supporting documents like time cards and wage rate tables.16U.S. Department of Labor. Fact Sheet 21 – Recordkeeping Requirements Under the Fair Labor Standards Act
Workers’ Compensation Insurance
Workers’ compensation is not a payroll tax, but it is a mandatory payroll-driven cost and belongs on this checklist. Florida law requires non-construction employers with four or more employees to carry coverage. In construction, the threshold drops to one employee.17The Florida Legislature. Florida Code 440 – Workers Compensation Corporate officers and LLC members can file for exemptions under specific ownership and filing rules, but each exempted officer still counts toward the employee threshold. Premiums run as a rate per $100 of payroll and vary heavily by job classification; an office worker costs far less to cover than a roofer. Going without required coverage exposes you to stop-work orders and penalties up to twice the premium you would have paid.
Is There a Local Payroll Tax in Sarasota?
No. Sarasota County repealed its county-level business tax in 2024, so no county business tax receipt is required or collected.18Sarasota County Tax Collector. Business Tax The City of Sarasota still charges a local business tax on businesses operating within city limits, but it is a flat annual fee for the privilege of doing business there, not a tax on payroll.19City of Sarasota. Local Business Tax Businesses outside city limits owe no local business tax at all. None of this changes what you withhold or deposit for payroll.
Employee or Independent Contractor
The single most expensive payroll tax mistake a Sarasota employer can make is treating a worker as an independent contractor when the IRS considers them an employee. If the IRS reclassifies your contractors, you owe back employment taxes, penalties, and interest for every misclassified worker across every open year. This is where routine small-business payroll audits turn into disasters.
The IRS applies a common-law test built on three categories of evidence: behavioral control (whether you dictate how, when, and where the work is done), financial control (who provides tools, who bears expenses, how the worker is paid), and the type of relationship (written contracts, benefits, permanency). Behavioral control carries the most weight. Setting a contractor’s hours, requiring them at your office, and supervising their methods will likely push the IRS to call them an employee no matter what the contract says.20Internal Revenue Service. Worker Reclassification – Section 530 Relief
Section 530 of the Revenue Act of 1978 provides a safe harbor that can shield you from back taxes if a reclassification happens, but only if you filed all required 1099s for the worker, never treated anyone in a substantially similar role as an employee, and had a reasonable basis for the contractor classification (industry practice, a prior IRS audit that didn’t challenge it, and so on).20Internal Revenue Service. Worker Reclassification – Section 530 Relief Keep contemporaneous records of why each worker was classified as a contractor. That file is the best insurance you can hold.