Federal income tax withholding

Federal income tax withheld from your paycheck is based on the IRS Pub. 15-T tables and your W-4. The amount is an estimate of your annual tax liability — your true tax is settled when you file.

Educational only — not advice. PayslipIQ USA provides educational guidance only. It is not legal, tax, accounting, payroll, employment, credit, financial, or consumer reporting advice. Results are estimates based on the information you enter or upload and may be incomplete, outdated, or inaccurate. PayslipIQ USA does not verify income, certify payroll accuracy, determine legal violations, or confirm that money is owed. PayslipIQ is independent and not affiliated with the IRS, SSA, U.S. Department of Labor, any state tax agency, employer, or payroll provider. Always confirm with your employer, payroll department, the IRS, your state labor or revenue agency, a CPA, attorney, or another qualified professional before acting.Figures reflect tax year 2025. Last verified 2025-04-01. Rules and limits may change.

How employers calculate it

Employers either use the wage-bracket tables (look-up table) or the percentage method (formula) from IRS Pub. 15-T. Both produce similar results. Most modern payroll software uses the percentage method.