What is required by law regarding employee earnings for taxes?

Employers are legally mandated to withhold taxes from employees' gross earnings. This requirement ensures that the appropriate amount of federal, state, and sometimes local taxes are collected upfront from employees' paychecks before the employees receive their net pay. Withholding from gross earnings means that all taxable income, including salary, bonuses, and overtime, is considered before any deductions for benefits or other expenses. This practice facilitates the collection of income tax, Social Security, and Medicare contributions, thereby simplifying the tax process for both employees and the government.

The other options do not accurately reflect tax withholding laws. Providing bonuses is not a requirement, and withholding taxes from net earnings would not be feasible since the net amount is what employees take home after all deductions. Additionally, there is a legal obligation for employers to withhold taxes, making the option of not withholding any taxes incorrect. Thus, the requirement to withhold from gross earnings is a crucial element of tax regulation compliance.