How to Calculate Federal Income Tax Withheld From Paycheck
The Internal Revenue Service processed more than 236 million tax returns and collected more $2.3 trillion in revenue in 2009. Federal income tax withholding is used to fund national programs, including law enforcement and foreign affairs. The IRS requires all employers to withhold this tax from employees' income, according to its regulations. If you do not receive a pay stub, it can be difficult to know the amount of federal income tax that was deducted from your paycheck. Even if you do receive a pay stub, you can figure out the amount deducted from your check.
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Instructions
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Access IRS Circular E via the IRS website or ask your employer for a copy. The IRS sends employers it has on record an updated Circular E annually. The Circular E has the withholding tax tables necessary to compute federal income tax. The withholding amount is based on your filing status, allowances, pay period and income.
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Consult your W-4 form for your filing status and allowances. You can ask your employer for a copy of your W-4. The W-4 and Circular E should match the tax year you are computing. Check Lines 3 and 5, respectively, of the W-4 for your filing status and allowances. See Line 6 as well to determine if you elected to have additional federal income tax withheld from each of your paychecks.
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Check your paycheck or pay stub for your gross pay---your income before deductions are withheld. If your paycheck does not indicate the gross amount, you can determine it yourself. If you are paid hourly, multiply your work hours for the pay period by your hourly rate. Include overtime, if it applies. If salaried, divide your annual salary by the number of pay periods in the year. For example, a bi-weekly pay period has 26 pay periods; a semi-monthly pay period has 24.
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Use the Circular E's withholding tax tables to determine federal income tax. Go to the tax table relevant to your pay period and filing status. Suppose you claim single with two allowances and earn $400 weekly, your federal income tax withholding is $18. If you opted to have extra federal income tax withheld per pay period, add it to the withholding amount.
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Tips & Warnings
Federal income tax may show on your paycheck or pay stub as FWT or FIT.
Your employer must also withhold Social Security and Medicare taxes from your paycheck. If state, city and local income taxes apply, your employer must withhold them as well. Deduct all payroll taxes plus voluntary deductions, such as retirement and health benefits, from your gross pay to arrive at your take-home pay.
The IRS withholding calculator can help you to determine if you are underpaying or overpaying federal income tax. It lets you know if you need to submit a new W-4 to your employer.
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