Final answer:
Employees are required to pay payroll taxes on their earnings, which include a 1.45% deduction for Medicare and a 6.2% deduction for Social Security, with employers contributing matching amounts. However, the overall economic burden often falls on the employees.
Step-by-step explanation:
Employees pay payroll taxes on their salary, wages, and other compensation. The current rate for Medicare tax is 1.45% for employees, with a higher rate of 2.35% for those with higher incomes. In addition to Medicare tax, employees also see a 6.2% deduction from their paycheck for Social Security. It's worth noting that employers match these payroll tax contributions, but the economic burden is often shifted to employees in the form of lower wages. Moreover, independent contractors, including those in the gig economy, are responsible for paying both the employee and employer portions of payroll taxes.