Definition of Payroll Taxes
The payroll taxes are the federal, state, and local taxes that pertain to the wages, salaries, commissions, bonuses, etc. of a company's employees.
Some of the employee-related payroll taxes are:
- Withheld from employees' wages and then matched by the employer. The matching amount is an additional expense of the employer
- Withheld from employees' wages but are not matched by the employer.
- Paid solely by the employer. The amount is additional expense of the employer
The employer must remit all of the above payroll taxes to the respective government agency within specified periods of time.
Examples of Payroll Taxes Withheld from Employees and Matched by Employer
Examples of payroll taxes that are paid by both the employee and the employer include the following:
Examples of Payroll Taxes Withheld from Employees' Wages Not Matched by Employer
Examples of payroll taxes which are withheld from an employee's gross wages and then remitted to the government agency by the employer include:
- Federal income taxes
- State and local income taxes (when applicable)
- Additional Medicare Tax for high income employees
Examples of Payroll Taxes Paid Solely by the Employer
Some payroll taxes are not withheld from the employees' wages. Instead, the entire amount is paid by the employer. Examples include the following:
- State Unemployment taxes
- Federal unemployment taxes or FUTA
Guidance on federal payroll taxes is available at www.IRS.gov and from your state government.