What type of tax is deducted from an employee's paycheck to fund social security and Medicare?

The type of tax that is deducted from an employee's paycheck to fund Social Security and Medicare is known as payroll tax. Payroll taxes specifically refer to the taxes that employers and employees must pay based on the wages or salaries of the employees. This includes the Federal Insurance Contributions Act (FICA) taxes that are used to fund both Social Security and Medicare programs, which provide benefits to retirees and those with disabilities, as well as healthcare for individuals aged 65 and older.

Federal income tax, while also deducted from paychecks, is unrelated to Social Security or Medicare funding. Instead, it is used to fund various government services and programs. State income tax similarly is based on employee earnings but goes to state government services. Property tax is entirely different as it is levied on real estate and does not involve payroll or employee compensation at all. Therefore, payroll tax is the correct answer because it directly supports Social Security and Medicare through mandatory deductions from employees' paychecks.