{"id":81601,"date":"2021-02-08T05:00:37","date_gmt":"2021-02-08T05:00:37","guid":{"rendered":"https:\/\/www.healthbenefitstimes.com\/glossary\/?p=81601"},"modified":"2021-02-08T05:00:37","modified_gmt":"2021-02-08T05:00:37","slug":"payroll-tax","status":"publish","type":"post","link":"https:\/\/www.healthbenefitstimes.com\/glossary\/payroll-tax\/","title":{"rendered":"Payroll tax"},"content":{"rendered":"

A tax liability imposed on an employer, or employee, related to the amount of the company payroll or individual pay, the revenues from which are used to finance a specific benefit. In the health field, payroll tax is often used synonymously with the social security tax. That tax, it is important to note, is not applied on total payroll, but rather on the wages of each employee up to a set maximum. In 1975, for example, the tax rate was 5.85 percent on the employer and 5.85 percent on the employee of the first $14,100 of employee earnings. Of this amount of tax rate, 0.9 percent was to finance hospital insurance, the other 4.95 percent was for other social security programs. Under the law, both the tax rate and the wage base are adjusted periodically. In January 1976, the taxable wage base increases to $15,300; the tax rate remains the same. The ceiling on wages to which the tax is applied means that the tax rate varies with income in a regressive manner. A person with an income of $7,000 or $14,100 pays 5.85 percent of his earnings in social security tax but a person with an income of $28,200 pays only 2.4 5 percent in social security taxes\u2014he pays 5.85 percent on the first $14,100 he earns, but nothing on the rest. A government requirement that an employer pay a set portion of the premium on group health insurance benefits for his employees is in reality a payroll tax on the employer, although it is often not recognized as such. Since the amount paid by the employer would be a set amount per employee not related to the amount of an individual’s earnings, its impact as a tax would be regressive.<\/p>\n

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 <\/p>\n","protected":false},"excerpt":{"rendered":"

A tax liability imposed on an employer, or employee, related to the amount of the company payroll or individual pay, the revenues from which are used to finance a specific benefit. In the health field, payroll tax is often used synonymously with the social security tax. That tax, it is important to note, is not […]<\/p>\n","protected":false},"author":2,"featured_media":0,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[16],"tags":[],"class_list":["post-81601","post","type-post","status-publish","format-standard","hentry","category-p"],"yoast_head":"\nPayroll tax - Definition of Payroll tax<\/title>\n<meta name=\"description\" content=\"A tax liability imposed on an employer, or employee, related to the amount of the company payroll or individual pay, the revenues from which are used to finance a specific benefit. In the health field, payroll tax is often used synonymously with the social security tax. That tax, it is important to note, is not applied on total payroll, but rather on the wages of each employee up to a set maximum. In 1975, for example, the tax rate was 5.85 percent on the employer and 5.85 percent on the employee of the first $14,100 of employee earnings. Of this amount of tax rate, 0.9 percent was to finance hospital insurance, the other 4.95 percent was for other social security programs. Under the law, both the tax rate and the wage base are adjusted periodically. In January 1976, the taxable wage base increases to $15,300; the tax rate remains the same. The ceiling on wages to which the tax is applied means that the tax rate varies with income in a regressive manner. A person with an income of $7,000 or $14,100 pays 5.85 percent of his earnings in social security tax but a person with an income of $28,200 pays only 2.4 5 percent in social security taxes\u2014he pays 5.85 percent on the first $14,100 he earns, but nothing on the rest. A government requirement that an employer pay a set portion of the premium on group health insurance benefits for his employees is in reality a payroll tax on the employer, although it is often not recognized as such. 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That tax, it is important to note, is not applied on total payroll, but rather on the wages of each employee up to a set maximum. In 1975, for example, the tax rate was 5.85 percent on the employer and 5.85 percent on the employee of the first $14,100 of employee earnings. Of this amount of tax rate, 0.9 percent was to finance hospital insurance, the other 4.95 percent was for other social security programs. Under the law, both the tax rate and the wage base are adjusted periodically. In January 1976, the taxable wage base increases to $15,300; the tax rate remains the same. The ceiling on wages to which the tax is applied means that the tax rate varies with income in a regressive manner. A person with an income of $7,000 or $14,100 pays 5.85 percent of his earnings in social security tax but a person with an income of $28,200 pays only 2.4 5 percent in social security taxes\u2014he pays 5.85 percent on the first $14,100 he earns, but nothing on the rest. A government requirement that an employer pay a set portion of the premium on group health insurance benefits for his employees is in reality a payroll tax on the employer, although it is often not recognized as such. Since the amount paid by the employer would be a set amount per employee not related to the amount of an individual's earnings, its impact as a tax would be regressive.\" \/>\n<meta property=\"og:url\" content=\"https:\/\/www.healthbenefitstimes.com\/glossary\/payroll-tax\/\" \/>\n<meta property=\"og:site_name\" content=\"Glossary\" \/>\n<meta property=\"article:published_time\" content=\"2021-02-08T05:00:37+00:00\" \/>\n<meta name=\"author\" content=\"Glossary\" \/>\n<meta name=\"twitter:card\" content=\"summary_large_image\" \/>\n<meta name=\"twitter:label1\" content=\"Written by\" \/>\n\t<meta name=\"twitter:data1\" content=\"Glossary\" \/>\n\t<meta name=\"twitter:label2\" content=\"Est. reading time\" \/>\n\t<meta name=\"twitter:data2\" content=\"1 minute\" \/>\n<script type=\"application\/ld+json\" class=\"yoast-schema-graph\">{\"@context\":\"https:\/\/schema.org\",\"@graph\":[{\"@type\":\"WebPage\",\"@id\":\"https:\/\/www.healthbenefitstimes.com\/glossary\/payroll-tax\/\",\"url\":\"https:\/\/www.healthbenefitstimes.com\/glossary\/payroll-tax\/\",\"name\":\"Payroll tax - Definition of Payroll tax\",\"isPartOf\":{\"@id\":\"https:\/\/www.healthbenefitstimes.com\/glossary\/#website\"},\"datePublished\":\"2021-02-08T05:00:37+00:00\",\"dateModified\":\"2021-02-08T05:00:37+00:00\",\"author\":{\"@id\":\"https:\/\/www.healthbenefitstimes.com\/glossary\/#\/schema\/person\/ccfef987a4882e6356ae6d77d33e74c5\"},\"description\":\"A tax liability imposed on an employer, or employee, related to the amount of the company payroll or individual pay, the revenues from which are used to finance a specific benefit. 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