Federal payroll taxes are used by the government to fund various social insurance programs for disable, unemployed and elderly people. Most people consider that federal payroll taxes are the second largest tax they have to pay every year, after individual income taxes.

Every year, the federal government levies the social security and medicare payroll taxes at a fixed rate, depending on annual gross income up to certain limits. And legislators try to fix the same tax for employees and employers, although usually it does not occur in practice. This year both employers and employees have to pay about the 7 percent of their revenues to the government.

Most people describe taxes as good or bad taxes. According to most people´s opinion, federal payroll taxes are part of the group of the good-taxes, because they have social purposes and are very helpful for those who need them the most. It federal taxes are used appropriately, they can help to build a better society.

See 2010 tax rates and 2011 tax rates.