Which expense category includes obligations to government for employee earnings?

The correct understanding here lies in recognizing that obligations to the government for employee earnings typically refer to the taxes withheld from employees' paychecks. These are classified under payroll taxes.

Payroll taxes are specifically the taxes that employers are required to pay based on their employees' earnings, and they include amounts for Social Security, Medicare, and unemployment insurance taxes, among others. These taxes are incurred directly in relation to payroll and form a part of the total employee compensation expenses.

On the other hand, tax expenses generally represent a broader category of obligations to the government, encompassing not just payroll-related taxes but also income taxes and various other taxes the business might owe. This distinction is crucial because payroll taxes are specifically tied to employee compensation, while tax expenses can refer to a variety of tax obligations.

Therefore, payroll taxes is the appropriate category that specifically includes the obligations to the government arising from employee earnings.