Payroll Tax

A payroll tax is any tax figured on wages. Some come out of the employee's pay, such as income tax withholding and Social Security and Medicare. Others are paid by the employer on top of wages, such as the employer share of FICA and federal and state unemployment tax.

In a narrow sense, payroll taxes are the ones tied to wages themselves: FICA, FUTA and SUTA. Income tax withholding is a prepayment of your yearly income tax that happens to run through payroll. On a stub, the employee side shows as FIT, SWT, OASDI and Medicare.

Employees can estimate their share with the paycheck calculator. Employers can see the full cost of a worker, including employer payroll taxes, with the payroll calculator.