What Is The Purpose Of The Payroll Tax?

The payroll tax typically consists of two parts: Social Security tax and Medicare tax. Social Security tax is levied on employees and employers to provide benefits for retired, disabled, and low-income individuals.

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Payroll tax is also known as FICA (Federal Insurance Contributions Act) tax. It is a federal tax that is collected from employees and employers to provide benefits to retired, disabled, and low-income individuals.

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Payroll taxes are made by both employers and employees. The employer is responsible for withholding payroll taxes from the employee’s paycheck and then submitting them to the government.

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The purpose of the payroll tax is to provide a stable source of funding for government programs. Without payroll taxes, these programs would be underfunded and unable to provide the necessary benefits to retired, disabled, and low-income individuals.

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