Payroll taxes are taxes imposed by the government on employers and employees to fund programs such as Social Security, Medicare, and unemployment compensation. Employers are responsible for withholding these payroll taxes from an employee’s wages each pay period and then remitting them to the appropriate governmental agency. From an accounting perspective, payroll taxes require a diligent approach to ensure accurate payment. Payroll tax accounting involves tracking payments, filing returns promptly and accurately, reconciling payroll accounts with state and federal agencies, and making adjustments for any errors that may have occurred. To start off on the right foot, employers should develop and implement proactive payroll tax strategies to minimize potential risks and liabilities.