Payroll taxes are two different things that get spoken about as one:
Withholding — amounts deducted from an employee's wages that you hold and pass to the authorities. This is the employee's money, not yours.
Employer contributions — amounts the business owes on top of the wage. This is a real cost and it is a meaningful percentage above the headline salary.
Why the distinction matters for cash
Withheld money sits in your bank account and is not yours. A business that treats it as available cash is borrowing from the revenue authority, which is the most expensive lender there is and the least forgiving.
This is the mechanism behind a large share of small-business failures that look sudden from outside: the money was spent as it arrived, and the liability arrived later.
Set it aside as it accrues rather than when it is due — the same discipline as tax reserve.
The true cost of an employee
Wage, plus employer contributions, plus workers compensation, plus any benefits.
Assume meaningfully more than the salary when deciding whether you can afford a hire — see hiring decisions.
Contractors do not remove the question
Paying somebody as a contractor does not settle whether they are one. Classification is decided by how the work actually happens, and getting it wrong is assessed retrospectively with the taxes, penalties and interest attached. See employee or contractor.
Where it appears
Under payroll and staff costs in your accounts, separately from wages, because the two behave differently and are reported differently.