Money & budgets
payroll tax
Taxes on wages that fund Social Security and Medicare, split between employee and employer. Social Security's portion applies only up to an annual wage cap.
In full
Payroll taxes are dedicated to trust funds rather than to general spending. Because the Social Security tax stops above a wage cap and applies to wages rather than to investment income, it takes a larger share of most workers' income than of very high earners', which is why it is described as regressive even though the benefits it funds are progressive.
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A plain-language explanation for civic education, not legal advice. When in doubt, the official source named above controls.