Payroll tax is a tax that employers withhold from their employees' wages and pay on behalf of their employees to the government. This tax is used to fund various government programs such as Social Security, Medicare, and unemployment benefits. Businesses are responsible for accurately calculating and withholding the correct amount of payroll tax from their employees' paychecks. Here are the key responsibilities that businesses have regarding payroll tax and payroll returns:

1. Withholding Payroll Taxes:

- Businesses must calculate the correct amount of federal income tax, Social Security tax, and Medicare tax to withhold from each employee's paycheck.

- They must also withhold state and local income taxes if applicable.

2. Filing Payroll Tax Returns:

- Businesses need to file various payroll tax returns, such as Form 941 (Employer's Quarterly Federal Tax Return) and Form 940 (Employer's Annual Federal Unemployment Tax Return), to report the taxes they have withheld from employees' paychecks.

- These returns are typically filed on a quarterly or annual basis, depending on the type of tax.

3. Depositing Payroll Taxes:

- Businesses are responsible for depositing the withheld payroll taxes, along with their share of Social Security and Medicare taxes, to the IRS and other relevant tax authorities on time.

4. Record Keeping:

- It is essential for businesses to maintain accurate records of payroll taxes withheld, returns filed, and tax payments made. These records may be subject to audit by tax authorities.

5. Compliance with Regulations:

- Businesses must stay informed about changes in payroll tax laws and regulations to ensure compliance and avoid penalties for non-compliance.

In conclusion, payroll tax is a critical aspect of running a business with employees, and it is essential for businesses to fulfill their responsibilities regarding payroll tax withholding, filing returns, depositing taxes, record-keeping, and compliance with regulations.