What are payroll taxes?
They are taxes that are imposed most commonly by the federal, state, and local governing agencies on wages paid to employees. Some taxes are withheld from the employee’s wages; others are paid directly by the employer. Most organizations are required to deposit with the IRS for withheld income tax, Social Security, Medicare and federal unemployment taxes. Most states and some localities impose payroll taxes as well.
Payroll taxes are taxes deducted from one’s salary or wages. There are essentially two types of payroll taxes, though this can vary among countries. Typically, there are those payroll taxes paid by the employee and those paid by the employer. In the US, most employers are required by law to take out payroll taxes to meet the taxes levied on the employee’s income. These taxes include deductions for both state and federal taxes. Employers must also tax their employees for Medicare and Social Security — two distinct federal health, disability, and retirement programs. While payroll tax is based on the employee’s income, payment for the tax comes from the employer and the employee. The employer, for example, is obligated to pay half of the Medicare and Social Security tax levied on an employee’s income. This payment is called the withholding, because the employer basically withholds that tax amount from the employees paycheck. The employee pays the other half, as well as other state and fe
by Rebecca Berlin Payroll taxes are the state and federal taxes that you, as an employer, are required to withhold and/or to pay on behalf of your employees. You are required to withhold state and federal income taxes as well as social security and Medicare taxes from your employees’ wages. You are also required to pay a matching amount of social security and Medicare taxes for your employees and to pay State and Federal unemployment tax.
