The extent of taxability and exclusions from income of some perquisites are discussed in the Deductions section. The fair market value of the shares determined at the date of issue under an employee share scheme, including as a result of the exercise of an option or right to acquire the shares, as reduced by any consideration paid by the employee for the shares, shall be chargeable to tax as salary.
However, where shares are issued to the employee subject to restriction on the transfer of such shares, no amount shall be included in salary of the employee until the earlier of the time the employee has a free right to transfer the shares or at the time when the employee disposes of the shares.
The value of the right or option to acquired shares under an employee share scheme is not chargeable to tax. An employee is taxed on the exercise of an option on the fair market value of the shares as reduced by the cost to the employee on acquisition.
The gain on sale is taxed in the year of disposal, considering the fair market value at the time of exercise of the option as a cost of the employee. Foreign-source income of returning expatriates citizens of Pakistan who were not resident in Pakistan during any of the preceding four tax years shall be exempt from tax in the tax year of return and the succeeding tax year.
Through Finance Act, , income from property for all taxpayers has been made subject to uniform taxation on net-income basis at the applicable rates. Meaning thereby that the separate block rates for chargeability of tax on property income of individuals or AOP are no longer applicable.
Withholding tax rates applicable in case of payment of rent of immoveable property to Individuals or AOP have also been revised in the following manner:. Capital gains on the sale, exchange, or transfer of movable capital assets are taxable. Capital gain on the sale of immovable property is subject to tax, depending upon the amount of gain and holding period in the manner tabulated below:.
Purchase of immovable property exceeding PKR 5 million and any other asset exceeding PKR 1 million by way of other than a banking channel shall not be considered as an eligible cost for the purpose of computation of capital gain as well as the related asset shall not be considered as an eligible depreciable asset. Moreover, such action would also invite penal consequences for the purchaser. As an employer, you are responsible for matching what your employees pay in FICA taxes.
However, the actual rate that employers pay is actually 0. Unfortunately, some states are currently ineligible for the full credit. You can learn more in our guide to FUTA.
Check out our full guide to FUTA for more info. Employers are also responsible for paying state and local city, county, etc. As with federal payroll tax, part of this tax is employer paid and part is employee paid.
In addition to state payroll tax State Unemployment Tax, or SUTA , employers are also responsible for remitting state income tax on behalf of their employees. Have all your SUTA questions answered in just a 3 minute read. You can find out more about payroll tax in your state and local area there.
Payroll tax is complex. The calculations are nitpicky and penalties are steep. We highly recommend outsourcing your payroll to a company like Gusto. When it comes time to record payroll costs on your books, Bench can take care of that for you. Learn more about how we are saving small business owners hours of admin every month. We're an online bookkeeping service powered by real humans. Bench gives you a dedicated bookkeeper supported by a team of knowledgeable small business experts.
Your bookkeeping team imports bank statements, categorizes transactions, and prepares financial statements every month. Get started with a free month of bookkeeping. Self-Employment Tax SE tax is a social security and Medicare tax primarily for individuals who work for themselves. It is similar to the social security and Medicare taxes withheld from the pay of most employees.
More In File. Federal Income Tax Employers generally must withhold federal income tax from employees' wages.
Social Security and Medicare Taxes An employer generally must withhold part of social security and Medicare taxes from employees' wages and the employer additionally pays a matching amount.
Additional Medicare Tax Beginning January 1, , employers are responsible for withholding the 0. Related Topics Employment Taxes. Calculate Your Employment Taxes. Publications Employment Tax Publications.
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