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Taxes

Withholding

Also called: tax withholding, PAYE, pay as you earn

Withholding is tax your employer deducts from each paycheck and sends to the tax authority on your behalf. It exists to make collection automatic and painless, and it's why most employees never write a tax cheque. Getting it wrong in either direction costs: under-withhold and you face a bill plus possible penalties, over-withhold and you've lent money for free all year.

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