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What is the payroll tax?

February 17, 2012  |  Share

From Answers.com

Payroll taxes are the taxes witheld by an employer from an employee’s paycheck which covers the appropriate amount of federal and state taxes as well as FICA tax (also known as Social Security). These taxes are held in Trust and submited on behalf of the employee to the various entities on a quarterly basis. It is this amount that is determined by the amount of deductions an employee claims on their W-4 Form. If too much tax is collected from an employee they will receive a refund at the end of the year when they file a tax return. If not enough taxes are paid through this process there will be a debt owed to the IRS and/or state on the tax returns at the end of the year.

 


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