Employers in Puerto Rico are subject to the Federal Income Contribution Act (FICA), or Social Security tax, and the Federal Unemployment Tax (FUTA). An employer is a person or organization for whom a worker performs services as an employee. As an employer you are required to withhold, report, and pay employment taxes.

To file the various employment tax returns, you need an Employer Identification Number (EIN). To obtain an employer Identification Number you need to file Form SS-4PR (PDF).

The Social Security taxes are used to finance the Social Security System. You must withhold a share of the employee's salary and contribute your share. The Social Security taxes consist of taxes to Social Security and to Medicare. Employers must report each of these taxes separately on Form 941–PR.

The three forms used to file the Social Security and Medicare taxes in Puerto Rico are: Form 941-PR (PDF), Form 943-PR (PDF), and Form 1040-PR (Anexo H-PR) (PDF). If you are not an agricultural employer and all of your employees are bona fide residents of Puerto Rico, file Form 941–PR to report all salaries paid, tips your employees reported to you, and Social Security and Medicare taxes you withheld. This tax return is filed quarterly and is due the last day of the month following the end of the quarter. For example, wages you paid January through March (the first quarter of the year) must be reported on Form 941–PR by April 30.

Most employers are required to deposit their employment taxes before the Form 941–PR is filed. For additional information about Form 941–PR refer to Topic 758, in English. For information about the rules to make deposits, refer to Topic 757, in English.

Household Employees

If you pay a household employee cash wages, you may be required to withhold and pay Social Security and Medicare taxes on all wages you pay to that employee. To see if you are required to withhold, see Publication 926 (PDF), Household Employer's Tax Guide, in English. File Schedule H-PR to report and pay Social Security and Medicare taxes corresponding to the employer and the employee for all household employees.

Household employees include housekeepers, maids, baby-sitters, gardeners, and others who work in or around your residence as your employee.

Repairmen, plumbers, contractors, and other business people who are self-employed and own their equipment, normally are not considered household employees.

Agricultural Employees

If you are an agricultural employer in Puerto Rico, you must file Form 943-PR (PDF) to report the employer's and the employee's share of the Social Security and Medicare tax for agricultural employees. To see if you are required to withhold and pay Social Security and Medicare taxes on your agricultural employees, refer to Publication 51, Agricultural Employer's Tax Guide, in English. Form 943–PR is an annual return you file at the end of each calendar year and is due January 31. Most employers are required to deposit the employment tax before the Form 943–PR is filed.

Publications 15 and 179 (Spanish version) explain the requirements for deposits.

Federal Unemployment Taxes (FUTA):

If you are an employer in Puerto Rico, you might have to file the Federal Unemployment Tax Return. To see if you are required, refer to Publication 51 if you are an agricultural employer or Publication 926 (PDF) if you are a household employer. All others refer to Publication 15 or Publication 179 (Spanish version). Employers in Puerto Rico, with the exception of those who use Schedule H-PR for household employees, are required to file Form 940–PR to report and pay unemployment taxes. Form 940-PR (PDF) is generally due by January 31.

Most employers are required to deposit the unemployment taxes. These taxes cannot be withheld from the employees' salaries.