Getting to Know the Two Types of Payroll Tax
When you receive your paycheck, there are actually two types of payroll tax included in the paystub. The first type is known as the withholding tax, a portion of the payroll tax taken directly from your salary. This payroll tax is often referred to as the pay-as-you-go tax, according to studies complied by the Villanova University Master of Science in Analytics program.
The second portion of the payroll tax doesn’t always appear on the paystub since it is paid by the company directly. Companies are obliged to pay taxes on the salary they pay out to cover things such as social welfare programs, worker’s compensation programs and other expenses. While the amount may not appear on your paystub, it is actually part of the company’s compensation package.
There are other taxes you also have to pay against your income. To find out more, checkout the Global Taxes infographic by Villanova University.