The employer is responsible for withholding and proper payment of most employee payroll taxes.

State income tax requirements are varied. There are several states without an income tax at this time, and states that do assess a withholding tax are free to regulate the payment and reporting of the tax in whatever way they choose.

The payment process is different from state to state, and payment frequencies may be annually, semiannually, quarterly, monthly, weekly, semiweekly or daily. Many states also mandate electronic transfer of funds when a certain threshold has been reached.

States with an income tax normally require an annual reconciliation comparing the amounts paid during the year to the sum of the withholding shown on the employee W-2s distributed for the year. The form numbers, information requirements and due dates are established by each state.

Local tax can be city, county, school district or any other type of tax required by a jurisdiction below the state level. These types of taxes are governed by the locality concerned. In some cases, the local taxes are paid and reported on the same form as the state tax, while other areas may require the use of their own unique forms.

Some localities require remittance on a quarterly basis, while others look for more frequent payments and/or reporting. Larger localities are now mandating electronic or automated annual reporting as well.