Definition
Taxes an employer withholds from wages and pays itself, including Social Security, Medicare, federal unemployment and state taxes.
What it means
Employers have several payroll tax duties. They withhold federal income tax and the employee's share of Social Security and Medicare tax, pay the matching employer share of 7.65%, and pay federal unemployment tax (FUTA) and state unemployment insurance. Deposits are made electronically on a monthly or semiweekly schedule, and most employers file Form 941 each quarter and Form 940 yearly, then give employees Form W-2 by January 31. Some states also require paid family leave or disability insurance contributions, and many cities and states have income tax withholding. Workers' compensation insurance is usually required too, though it is not a tax. Late deposits can bring penalties, and owners can be personally liable for unpaid withheld taxes.
Example
For an employee paid $40,000, the employer pays about $3,060 of Social Security and Medicare tax, $42 of FUTA after the full state credit, plus state unemployment tax at the employer's assigned rate.
Illustrative numbers only. Your situation will differ.