Payroll tax is a tax that employers are required to withhold from their employees' wages. This tax is used to fund various government programs, including Social Security and Medicare. The amount withheld is typically a percentage of the employee's earnings and is paid directly to the government. Employers also contribute to payroll taxes, matching the amount withheld from employees. This means that both the employee and employer share the responsibility for funding these essential programs. Payroll taxes are crucial for maintaining the financial stability of social safety nets that support individuals in need during retirement or times of health crisis.