Module 1: Payroll Taxes and Federal Income Tax Withholding
Employers withhold taxes from employees' pay.
- Gross pay is the amount the employee earns.
- Net pay, or take-home pay, is the amount the employee receives after deductions.
The difference between gross pay and net pay is:
- Social Security taxes
- Medicare taxes
- income tax withheld
- other amounts withheld
Employers send the withheld taxes to the federal government.