Calculating payroll taxes is the process of determining and collecting the appropriate taxes for each employee’s specific situation, taking into account all taxable wages, deductions, credits and other relevant information. Employers are responsible for properly filing all applicable taxes on behalf of their employees, as well as making sure all payments are made accordingly and on time. This includes not only federal and state income taxes, but all applicable local, federal and state employment taxes like Social Security, Medicare and unemployment taxes. It is essential that employers be knowledgeable about all applicable laws and regulations to ensure accurate calculation of paychecks and payroll taxes.