payroll tax is a tax that an employer withholds and pays on behalf of his employees, and it is based on the wage or salary of the employee. In most countries, including the United States, federal authorities as well as many state governments collect some form of payroll tax.
Governments use revenues from payroll taxes to fund programs such as Social Security, health care, unemployment compensation and workers compensation. Sometimes local governments collect a small payroll tax to maintain and improve local infrastructure and programs including first responders, road maintenance, and parks and rec programs.