Starting a small business can be exciting, especially in Puerto Rico. In the fallout from Hurricane Maria, the territory is undertaking some pretty impressive development initiatives, from building a new energy grid from scratch to the new “gold standard” public private partnership law to encourage investment. If you’ve started a small business in Puerto Rico, you’ve done so at the right time. That said, understanding your Puerto Rico state payroll taxes and obligations can be a bit tricky. Here’s what you need to know and how to tackle this responsibility in a way that saves both time and money.
Understanding Your Tax Obligations
As in all American states, Puerto Rico requires employers to withhold state income taxes from employee paychecks. Employer tax rates range from 2.2% to 5.4%, and the new employer tax rate is 3.2%. The easiest way to determine your business’s specific withholding tax rate is to utilize Puerto Rico State Payroll Tax Rates tables, found in the appendices of the state-provided Withholding of Income Tax at Source on Wages Employer’s Guide. Employers can and should also complete form 499R-4 Withholding Exemption Certificate to calculate withholdings for state income tax. Employers must also pay unemployment taxes, which have their own tax tables within the guide. Finally, in Puerto Rico, the state imposes a temporary disability insurance tax on both employers and employees.
If this sounds like a lot of calculations, you’re right – it is. If you’re manually calculating and distributing payroll, the obligation to Puerto Rico state payroll taxes can feel like an incredible burden. Switching to a low-cost, semi-automated payroll system is an easy way to alleviate the burden while saving both time and money. This is exactly how AMS Payroll ($129), one of our most popular tools, can help.
AMS Payroll and Your Puerto Rico State Payroll Taxes
AMS Payroll is the perfect software tool for your small business. The program automatically calculates federal, state and local payroll taxes, decreasing the time you need to spend calculating checks each pay period. This data, as well as employee information, is then stored in a back-end data hosting feature for future use and access. This ensures quarterly and annual reporting is as smooth and painless as possible.
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In addition to automatically calculating a variety of taxes, AMS Payroll is just a really good payroll software. It prints more than 30 types of checks and facilitates direct deposit processing, includes an easy payer and employee setup, and processes both live and after-the-fact payroll. Users can import data from QuickBooks, PeachTree, Microsoft Excel, and other tab delimited text files and export data to tab-delimited files, providing optimal flexibility and convenience. If you’re looking for a way to speed up your Puerto Rico state payroll taxes, this is a great answer.
Investing in AMS Payroll is as easy as clicking the “buy now” button online. If you’re still unsure if this is the product for you, we encourage you to download our free demo software. This allows potential customers to try the product before putting any money on the table. We know buying payroll software is a big decision, and we want you to make the best choice for your business.