In brief
padding is the space between content and border. On a button, it separates the label from the edges and contributes to the element's own dimensions.
Useful to know
padding is the space between content and border. On a button, it separates the label from the edges and contributes to the element's own dimensions. [1]
This differs from margin, which creates space outside. When aiming for a larger interactive area, inspect the actual button box rather than merely increasing the distance to neighbouring elements.
Sources
For further detail and to check the information: