At the lowest level of employment, such as the minimum wage, employers must pay a fixed payroll tax for each employee they hire. To offset this burden on the employer, employers attempt to reduce the wages paid to their employees. Since employers cannot reduce the amount paid to employees to the minimum wage level, they end up reducing the number of employees they hire. This is what is known as a “salary transfer”. Fundamentally, payroll taxes at this level cannot be passed on to minimum wage employees because their wages cannot be lowered to a level that offsets the burden of the tax. This causes a problem for low-wage workers trying to find work because getting hired places a burden on employers, who are unwilling to pay. Bottom line, the difference between payroll tax and income tax is the person who ends up paying that tax. Employers pay payroll taxes, while the employee pays income tax. Wage shifting occurs when employers attempt to shift the burden of payroll tax onto employees. However, at the minimum wage level employers cannot lower wages any further and as a result end up hiring less