Employment taxes are an additional kind of federal tax beyond ordinary income tax, and consist of Social Security and Medicare taxes that are withheld from a personβs paycheck. Employment taxes are also referred to as payroll taxes as they often show up on employee pay stubs. The Social Security wage withholding rate in 2018 is 6.2% up to the FICA wage base. The Medicare component is 1.45%, and it does not phase out above the FICA wage base.