What are payroll taxes?

 Also known as employment taxes, payroll taxes include federal income tax withheld from employee wages, as well as both the employer and employee portions of Social Security and Medicare taxes. In addition, payroll taxes include the Federal Unemployment Tax, also known as FUTA, which most employers need to pay but is not withheld from employee wages.

In some cases, backup withholding applies to payments made to nonemployees, usually because the recipient failed to provide their correct Taxpayer Identification Number (TIN), to the business making the payments. A TIN can be either a social security number, employer identification number or individual taxpayer identification number. For more information about backup withholding see Tax Topic No. 307.