What are payroll taxes and how do they work?

What are payroll taxes and how do they work?

Payroll taxes are taxes withheld from employees' wages and are used to fund social security, Medicare, and other government programs.

What percentage of my paycheck goes to payroll taxes?

Typically, payroll taxes can take about 7.65% of your paycheck for Social Security and Medicare, but this can vary based on your income.

Are there any deductions I can claim to reduce my payroll taxes?

While payroll taxes are generally fixed, certain pre-tax deductions like retirement contributions can lower your taxable income.

How do payroll taxes differ from income taxes?

Payroll taxes are specifically for funding social programs, while income taxes are based on your overall earnings and fund government operations.

What happens if my employer doesn't withhold payroll taxes?

If your employer fails to withhold payroll taxes, you may be responsible for paying them directly, which can lead to penalties.