Payroll taxes are taxes that employers must legally withhold or collect from their employees and pay to the appropriate taxing authority. Calculating payroll taxes for an employer involves subtracting withholding tax from the employee’s gross income; then, any additional taxes due are calculated and added in to arrive at the total taxes owed by the employer for the payroll period. In order to stay compliant with all applicable laws, employers must ensure that they accurately calculate payroll taxes for each employee.