how do employers calculate how much to withhold from employee pay 
after an employee fills out form w 4 it is up to the employer to calculate how much to withhold from each paycheck for federal income taxes payroll software should have a built in calculator to work all this out alternatively employers can consult irs publication 15 t federal income tax withholding methods the bottom lineensuring that the right amount of money is withheld from each paycheck to pay federal income taxes is important employees who don t fill out form w 4 carefully can get hit with a nasty tax bill out of the blue or essentially end up lending the irs money free of charge 