payroll tax

noun

1

: a tax that is paid by a company and that is based on the amount of money that the company spends paying all of its employees

2

: money that is taken from a person's pay and given directly to the government as income tax

Examples of payroll tax in a Sentence

Recent Examples on the Web

In any year in which payroll tax revenue is insufficient, Social Security uses OASI funds to cover the shortfall in benefit payments. —Alexis Simmerman, Austin American Statesman, 5 Mar. 2026

In Vermont, a payroll tax on employers funds child-care subsidies. —Morgan Lee, Los Angeles Times, 3 Mar. 2026

Over the next 30 years, the fund is expected to rely on the Medicare payroll tax for about three-quarters of its annual income, with another roughly one-eighth derived from income taxes on Social Security benefits. —Nick Lichtenberg, Fortune, 23 Feb. 2026

Social Security is financed by a payroll tax paid for by employers and employees. —Asher Notheis, The Washington Examiner, 21 Feb. 2026

Rhymes for payroll tax

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Legal Definition

payroll tax

noun

pay·​roll tax

: a tax that is levied as a percentage of an employee's pay and is usually paid by the employer