Payroll tax is a type of tax that employers are required to withhold from their employees' paychecks. It is typically used to fund various government programs, such as social security and Medicare. The amount of payroll tax an employee pays depends on the amount of income they earn; it is usually calculated at a rate of 7.65% for Social Security and 1.45% for Medicare (as of 2020). Employers are also required to match these amounts, making the total payroll tax contribution equal to 15.3%.