Employers are responsible for deducting and remitting to the appropriate government entity payroll taxes for their employees. Payroll taxes include federal income and Social Security taxes, and in some jurisdictions, state and local income taxes. Regular employees -- meaning, salaried and hourly employees -- have taxes deducted from their gross wages, as do contract employees. For taxation purposes, contract employees are subject to the same payroll taxes and deductions as regular employees. Many people confuse contract employee status with independent contractor status. They are not the same. Independent contractors are responsible for calculating and remitting their own income taxes to the government. Employers who engage the services of an independent contractor do not withhold taxes from payments to them. Contract employees and salaried employees are treated the same regarding payroll deductions for taxes.