Federal income tax withholding

In accounting, federal income tax withholding means the income tax an employer withholds from each paycheck, worked out from the employee's Form W-4PayrollForm W-4The form a new employee gives the employer to set federal income tax withholding — filing status, the two-jobs checkbox, credits, other income, deductions and extra withholding. Kept by the employer, not sent to the IRS unless it asks. A state with an income tax may use its own certificate, such as California's DE 4 by a method in IRS Pub. 15-T — in an automated payroll, the percentage method and Worksheet 1A — and deposited with FICAPayrollFICASocial Security tax — 6.2% of wages up to the year's wage base — and Medicare tax — 1.45% of all wages — each paid twice: withheld from the employee and matched by the employer. 7.65% a side below the wage base.