Withholding Tax is a government-required deduction from an employee's earnings, which is taken out before they receive their paycheck. This tax is used to prepay income taxes, ensuring that individuals contribute to their tax obligations throughout the year rather than in a lump sum at tax time. Employers are responsible for calculating and remitting this tax to the government on behalf of their employees. The amount withheld depends on various factors, including the employee's income level and the information provided on their W-4 form. This system helps streamline tax collection and reduces the risk of individuals facing large tax bills at the end of the year.