When the government imposes a payroll tax on workers,

Question

Quizplus · Accepted Answer

The incidence of a payroll tax, whether levied on workers or employers, does not depend on which side of the market is legally responsible for paying the tax. The economic burden of the tax is distributed between workers and employers depending on the elasticities of supply and demand for labor. This means that the effects on employment and wages will be similar regardless of whether the tax is imposed on workers or employers.

When the Government Imposes a Payroll Tax on Workers