lastplayed
Member
in economic terms, nothing.
In the US, you are taxed around 7.5% up to $108k of wages in payroll taxes. The employer must contribute the other 7.5%. Self-employed contribute the full 15% (i'm rounding btw and this is in normal times, we have a temporary tax cut right now).
Income taxes are taxed on all wages, not capped at $108k. They are also at different tax rates.
http://www.forbes.com/sites/moneybuilder/2011/09/30/2012-federal-income-tax-brackets-irs-tax-rates/
What's the difference between payroll and income? Isn't it the same thing? I've only ever heard of income tax (what I pay in NZ), and it looks more like the second chart.