Internal Revenue Service United States Department of the Treasury
Module 1: Payroll Taxes and Federal Income Tax Withholding

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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.

 

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