Overview of Employment Taxes in Puerto Rico
Employers in Puerto Rico are required to comply with U.S. employment tax laws, including:
FICA taxes: Social Security and Medicare taxes.
FUTA taxes: Federal Unemployment Tax Act (FUTA) taxes.
As an employer, you must withhold, report, and pay employment taxes on wages paid to employees.
Employer Identification Number (EIN)
To file employment tax returns, you need an Employer Identification Number (EIN).
If you don’t have an EIN, you can apply for one:
Online (recommended method).
By filing Form SS-4 (English) or Form SS-4 (sp) (Spanish) via fax or mail.
Only use one application method per entity to avoid receiving multiple EINs.
✅ For more details, visit the Employer Identification Number (EIN) page on the IRS website.
FICA Taxes: Social Security and Medicare
FICA taxes fund the Social Security and Medicare systems. Employers in Puerto Rico must:
Withhold the employee's share of FICA taxes.
Contribute the employer's portion.
FICA rates for 2025:
Social Security:
6.2% paid by the employer.
6.2% paid by the employee.
12.4% total contribution.
Medicare:
1.45% paid by the employer.
1.45% paid by the employee.
2.9% total contribution.
✅ Note: FICA taxes are reported using Forms 941, 943, or 944, depending on the type of employer.
Additional Medicare Tax
Employees earning above $200,000 annually are subject to an Additional Medicare Tax of 0.9%.
Employer's responsibility:
Withhold 0.9% on wages exceeding $200,000, regardless of the employee's filing status.
Continue withholding through the end of the calendar year.
Employer match:
There is no employer match for the Additional Medicare Tax.
✅ For more information, refer to:
Employment Tax Forms for Puerto Rico
Employers in Puerto Rico use the following forms to report and correct FICA taxes:
1. Form 941 – Quarterly Tax Return
For non-agricultural employers with bona fide Puerto Rican residents as employees.
Used to report wages, tips, other compensation, and FICA taxes.
Filing schedule:
Due quarterly by the last day of the month following the end of the quarter.
Example: Wages paid from January to March are reported by April 30.
If the due date falls on a weekend or holiday, you may file on the next business day.
2. Form 943 – Annual Return for Agricultural Employers
Used by agricultural employers in Puerto Rico.
Reports wages and FICA taxes for agricultural employees.
Filing schedule:
Filed annually by January 31 of the following year.
If you’ve deposited all your taxes on time, you may file by February 10.
3. Form 944 – Annual Tax Return for Small Employers
Filed by small employers with an estimated annual tax liability of $1,000 or less.
Filing schedule:
Due annually by January 31 of the following year.
Employers must request Form 944 filing status on their Form SS-4 or be notified by the IRS.
Employers exceeding the $1,000 threshold during the year must still file Form 944.
4. Schedule H (Form 1040) – Household Employers
For household employers (e.g., housekeepers, babysitters, gardeners) paying cash wages.
Used to report and pay FICA taxes for household employees.
Filing schedule:
Included with the employer's Form 1040.
✅ Household employers should refer to Publication 926 for more details.
Tax Deposit Requirements
Most employers in Puerto Rico are required to deposit their FICA taxes electronically, rather than paying them with the tax return.
Form 944 filers: May be allowed to pay with their return.
Deposit deadlines:
For Form 941, you can file by the 10th day of the second month following the quarter if all taxes were deposited on time.
For Forms 943 and 944, you can file by February 10 if taxes were deposited on time.
✅ For more details on deposit schedules, refer to Publication 15.
FUTA Tax Requirements
Employers in Puerto Rico may be required to pay FUTA taxes.
Form 940: Used to report and pay FUTA taxes (Federal Unemployment Tax).
Filing schedule:
Annually by January 31 of the following year.
If taxes were deposited on time, you have until February 10 to file.
Exceptions:
Household employers use Schedule H (Form 1040) to report FUTA taxes.
✅ Note: FUTA taxes are not withheld from employees' wages—they are paid entirely by the employer.
✅ Key Takeaways:
Employment Taxes in Puerto Rico:
Employers are subject to FICA and FUTA taxes.
Must withhold, report, and pay employment taxes.
FICA Rates (2025):
Social Security: 6.2% (employer) + 6.2% (employee) = 12.4% total.
Medicare: 1.45% (employer) + 1.45% (employee) = 2.9% total.
Additional Medicare Tax:
0.9% on wages exceeding $200,000.
No employer match.
Filing Forms:
Form 941: Non-agricultural employers.
Form 943: Agricultural employers.
Form 944: Small employers (annual filers).
Schedule H (Form 1040): Household employers.
FUTA Taxes:
Filed on Form 940 (annually).
Not withheld from employee wages.