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Dear Employee Draw,
Any amounts paid to employees to compensate their services, no matter how large or small, as long as it is countable in terms of dollar amount, salary or commission, all subject to payroll taxes. So, this employee draw is part of his/her salary and is subject to all payroll taxes, federal or state, etc. At year end, it is reported on W-2 as wage income to the employee.
The link attached below is a reference on the subject.
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