Withholding refers to the practice of deducting a portion of an employee's earnings, typically for taxes or other legally mandated purposes, before disbursing their net pay. These deductions are withheld by the employer and remitted to the relevant authorities on behalf of the employee.

Example
An employee earning $3,000 per month may have federal income tax, state income tax, and Social Security contributions withheld from their paycheck. After these withholdings, their net pay may be $2,200.