BPA Payroll Accounting Practice Test 2026 – Complete Preparation Resource

The requirement to withhold payroll taxes from employees is heavily dictated by federal law. In this context, the answer that includes federal income tax and social security taxes is correct because both of these payroll taxes are mandated to be withheld from employee paychecks.

Federal income tax is withheld based on the employee's earnings and their completed W-4 form, which provides the employer with the necessary information to determine the correct withholding amount. Social security tax, part of the Federal Insurance Contributions Act (FICA), is also a mandatory payroll tax that supports the social security system and provides benefits for retirees, the disabled, and survivors of deceased workers. Employers are required to match the social security tax withheld from employees, which ensures that both parties contribute to this essential program.

Other options may include taxes that can vary based on jurisdiction or are not universally required by law. For instance, state income tax withholding is only required in certain states, local taxes are not uniformly mandated, and unemployment insurance is typically an employer-paid tax rather than withheld from employee wages. Sales tax is not related to payroll and is typically applied to sales transactions instead of wages. Therefore, the specific requirement to withhold federal income and social security taxes makes this answer the most accurate in the context of mandatory payroll tax