In the United States, government levies payroll taxes at fixed rates, which goes automatically to Social Security and health programs. The annual salaries of the employees it is taken into account to calculate the payroll taxes’ rate, which employers and employees split, contrary to those self-employed people, who have to pay the entire payroll tax.

Payroll taxes’ deduction include: federal income tax withholding, Social Security tax withholding, Medicare tax withholding, local taxes withholding such as school taxes, state disabilities and unemployment insurance. Most of employees also agree to pay the so called voluntary payroll taxes, which deductions usually include health insurance and life insurance premiums, meals, uniforms and other expenses related to jobs.

The employers and employees ‘payroll taxes together make up the Federal Insurance Contributions Act (FICA) taxes, which go directly to Social Security (employers and employees pay 6,2 percent) and Medicare (employers and employees pay 1,45 percent).

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