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payroll tax

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payroll tax

–noun
a tax levied against the amount of wages and salaries paid workers.

Origin:
1980–85
Dictionary.com Unabridged
Based on the Random House Dictionary, © Random House, Inc. 2009.
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Financial Dictionary

Payroll Tax

Tax an employer withholds and/or pays on behalf of their employees based on the wage or salary of the employee. In most countries, including the U.S., both state and federal authorities collect some form of payroll tax.

Investopedia Commentary

Governments use revenues from payroll taxes to fund such programs as social security, health care, unemployment compensation, worker's compensation, and sometimes even local governments require a small tax to maintain and improve local transportation.

On an employee pay stub, payroll taxes deducted are likely to be itemized.

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See also: Flat Tax, Income Tax, Local Tax, Medicare Wages, Progressive Tax, Taxes, Withholding

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Legal Dictionary

Main Entry: pay·roll tax
Function: noun
: a tax that is levied as a percentage of an employee's pay and is usually paid by the employer
Merriam-Webster's Dictionary of Law, © 1996 Merriam-Webster, Inc.
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Encyclopedia

payroll tax

levy imposed on wages and salaries. In contrast to income taxes, payroll taxes do not include income from capital sources such as dividends and interest

Learn more about payroll tax with a free trial on Britannica.com.

Encyclopedia Britannica, 2008. Encyclopedia Britannica Online.
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