A withholding tax, also called a retention tax, is a government requirement for the payer of a customer invoice to withhold or deduct tax from the payment, and pay that tax to the government. n most jurisdictions, withholding tax applies to employment income.
With normal taxes, the tax is added to the subtotal to give you the total to pay. As opposed to normal taxes, withholding taxes are deducted from the amount to pay, as the tax will be paid by the customer.