Final answer:
The TD1-WS is used for the purpose of calculating tax deductions, which include advance payment of income tax, contributions to social security, and various mandatory insurances like unemployment and disability. It helps determine the correct withholding tax amount from an employee's paycheck and ensures that employers pay their share of taxes related to employing workers.
Step-by-step explanation:
The TD1-WS, also known as Tax Deductions Worksheet, is primarily used for calculating tax deductions that come out of an employee's wages. It serves the purpose of determining the correct amount of taxes to be withheld by employers, encompassing aspects such as income tax and contributions to social security, unemployment and worker's compensation insurance. The deductions are a segment of the broader system of withholding tax or PAYE (pay-as-you-earn) tax, which includes various insurances and social contributions.
Employers also have their own set of taxes they are responsible for, which are not deducted from employees' wages but rather paid from the employers' funds. These can be proportional to an employee's pay and are dedicated to funding social security and other mandatory insurance programs. This component of employer payments includes contributions to employee insurance (mainly health), retirement plans, and legally required contributions like Social Security and Medicare.