Calculating payroll tax withholding is the process of taking money from an employee’s wages to pay taxes and other government-mandated contributions, such as Social Security and Medicare. Employers are responsible for calculating and collecting these taxes, which vary based on the location of the business and whether it’s a public or private company. Employers must also stay up to date on any changes in local, state, and federal rules and regulations so they can accurately calculate their employees’ withholdings each pay period. Calculating payroll taxes is essential to keeping your business compliant with the law – but with careful planning and attention to detail, it doesn’t have to be a headache.