Now that we know exactly what a liability is, we can understand why deductions for employees' earnings are classified as liabilities for the employer. They are simply amounts that are owed to others. This is things such as federal taxes, state and local income taxes, and even contributions that are made to different pension plans. You see the employer has withheld the earnings but does not pay the government to the end o f the period or in some cases the end of the year. The reason it must be paid to the government is because it is not the company's money. Can I get a response for this a hundred words or more