Final answer:
If an employee has $40 withheld for the Canada Pension Plan, the employer would also need to pay $40 to match that contribution. Employees and employers split payroll taxes, and the employer's share may be indirectly reflected in the employee's lower wages.
Step-by-step explanation:
When an employee has $40 withheld from their pay for the Canada Pension Plan (CPP), the employer is also required to match that contribution. Therefore, the employer would also need to pay $40 for CPP. Payroll taxes in general are a shared responsibility for both the employee and the employer. Employees often see deductions for Social Security and Medicare, in which the employer matches the amounts deducted to fund these programs. While the employee officially pays half of the payroll taxes, it is important to note that economists argue that employees indirectly pay the employer's portion as well through lower wages.
Relying on payroll deductions, employers withhold taxes for income tax, social security contributions, and various insurances. Moreover, employers fund parts of the social security system and insurance programs with taxes that are proportionally linked to the employee's pay or consist of fixed charges.