Find out how much federal income tax should be withheld from each paycheck — and whether you'll owe or get a refund.
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The W-4 (Employee's Withholding Certificate) tells your employer how much federal income tax to withhold from your paycheck. The 2020 redesign removed allowances — you now enter dollar amounts directly for multiple jobs, deductions, and dependents.
The new W-4 doesn't use allowance numbers (0, 1, 2). Instead, you leave Step 3 and 4 blank for standard withholding, or fill them in to adjust. Leaving everything blank gives you standard withholding — which works for most single-job households.
To avoid underpayment penalties, you must withhold at least 90% of your current year tax or 100% of last year's tax (110% if income > $150,000). If you have side income, fill in Step 4(c) to add extra withholding each period.
Update your W-4 after any major life change: marriage, divorce, new child, buying a home, starting a second job, or a significant pay change. The IRS recommends reviewing it annually.
No — this calculator estimates federal withholding only. State income tax is separate and varies by state. Seven states have no income tax: Alaska, Florida, Nevada, South Dakota, Tennessee, Texas, and Wyoming.
The W-4 Withholding Calculator estimates how much federal income tax your employer should withhold from each paycheck based on the information on your IRS Form W-4. Enter your filing status (Single, Married Filing Jointly, Head of Household), your expected annual income, any additional income from other jobs or your spouse's income, anticipated deductions above the standard deduction, and any tax credits you expect to claim. The calculator shows you the recommended withholding settings for your W-4 and projects whether you are on track for a refund, a balanced return, or an unexpected tax bill when you file your annual return.
The W-4 form was significantly redesigned by the IRS in 2020 to align more closely with how modern households actually earn income — dual-income couples, multiple jobs, and self-employment income all create complexities that the old allowances system handled poorly. The current W-4 uses five steps: Step 1 collects personal information and filing status; Step 2 accounts for multiple jobs or a working spouse; Step 3 calculates the Child Tax Credit and other dependant credits; Step 4 captures other income, deductions, and extra withholding; and Step 5 is your signature. Steps 2–4 are optional — if you leave them blank, your employer withholds as if you have no other income or credits, which often leads to over-withholding for single-job filers.
Getting withholding right is about more than the size of your refund. A large refund means you lent the government money interest-free throughout the year. Under-withholding means you could owe a penalty when you file — the IRS charges an underpayment penalty if you owe more than $1,000 at tax time and did not pay at least 90% of your current-year liability or 100% of last year's tax. The ideal withholding lands you within a few hundred dollars of your actual tax liability — no penalty, and no large check written in April. Use this calculator after any major life event (marriage, divorce, new child, job change, side income) to keep your withholding accurate throughout the year.
The IRS recommends reviewing your W-4 at the start of each year and after any major life event — new job, marriage, divorce, birth of a child, significant income change, or large tax bill or refund. There is no limit on how often you can submit a new W-4 to your employer; changes typically take effect within a pay period or two.
The pre-2020 W-4 used "allowances" — claiming 0 meant maximum withholding and claiming higher numbers reduced it. The current W-4 no longer uses allowances; the five-step system replaced them. If you have an older W-4 on file your employer should still honour it, but updating to the current form typically gives more accurate results for modern income situations.
If you owe more than $1,000 when you file, and you did not pay at least 90% of your current year tax or 100% of last year's tax (110% for higher earners), the IRS charges an underpayment penalty. Use Form 2210 to calculate it, or adjust your withholding during the year to avoid it.
You can claim exempt if you had zero tax liability last year and expect zero this year. If you write "Exempt" on your W-4, your employer will not withhold any federal income tax. This is appropriate for low-income earners, but if you claim exempt incorrectly and owe tax at filing time, you may face penalties and interest.
No. The federal W-4 only covers federal income tax withholding. Most states have their own withholding form — some use the federal W-4, others have a separate state form. Check with your employer's payroll department or your state's revenue department for state-specific withholding instructions.