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Business Payroll: How to Calculate Federal Withholding Tax


ezPaycheck payroll software is the easy-to-use and flexible payroll tax solution for small businesses. It can calculate federal tax, Social Security Tax, Medicare Tax, unemployment tax, 50 state taxes, local tax and more.

Here are the instructions for federal income tax withholdings

1. Download and install the right version to calculate your paychecks

ezPaycheck 2012 comes with Year 2012 federal and state tax tables. ezPaycheck 2013 comes with Year 2013 federal and state tax tables. You should use the right version of ezPaycheck paryoll software.

If you are a new customer, you are welcome to download and test drive ezPaycheck for 30 days free with no obligation. No credit is needed. No registration is needed.

ezPaycheck Payroll Software 30-day Free Demo Version Download (Year 2008 - Current)

2. ezPaycheck will calculate the federal income tax withholding automatically

When you set up employee profile, please make sure you check federal tax option. (This option is checked by default.)

If you have any questions about how to set up employee, you can refer to ezPaycheck Payroll Software Quick Start Guide.

employee tax options
(Click image to enlarge)

3. Why there is no federal withholding taken out of my paycheck?

According to CNNMoney, a little more than 43% of U.S. households -- or 70 million homes - will end up owing no federal income taxes for 2013.

Employee can claim allowances on the W-4. Each allowance will lower her taxable income. The more allowances she claims the less federal income tax she pays; the less she claims, the more federal tax she pays.

If you see the $0 federal tax on the paycheck, do not worry about it. Your employee's income may not be high enough to withhold federal income tax. You can test it by increasing the pay rate.

4. Why the federal income tax is not correct

Usually such issue is caused by pre-tax deduction.

5. More Information

  • How to calculate the federal tax manually
  • If you like calculate it manually by using income tax tables, you can also refer to this article about how to calculate federal tax manually.

  • How to enter the federal tax manually when adding a paycheck
  • You can use the manual check feature to enter the federal taxes and state taxes manually instead of using tax tables.

  • Why the state income tax is not correct

  • Why the social security tax is not correct

  • How to print paystub into PDF file

  • Sample Paychecks

    Paycheck check-on-top formatk    Paycheck check-on-top formatk    Data only for pre-printed check paper
    payroll software

    ezPaycheck Makes 2024 Payroll An Easy, In-House Task!

    (For Windows and Mac)

  • Trusted by Thousands for Two decades.
  • Calculate Federal & State Taxes, Print Paychecks, Print W2, W3, 941, 943 and 940.
  • User-friendly, Easy-to-use
  • No monthly fee. No hidden cost.

  • Try it free for 30 days with no obligation. No credit card required.


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