What is withholding tax (2026)

What is withholding tax? Withholding tax is money your employer holds back from each paycheck and pays to the government for you, as an advance on your income tax and as Social Security and Medicare tax. It is a prepayment, not an extra tax, and your real tax is settled when you file.

What withholding tax is

Withholding is how the tax system collects from employees: instead of paying the government once a year, your employer takes a share out of every paycheck and sends it in for you. The amounts show on your stub as lines such as FITW, OASDI, MED EE and state income tax. See all the codes in pay stub abbreviations explained.

It is a prepayment. At tax time your real tax is worked out on your return, and everything withheld counts as a payment toward it.

What gets withheld

Federal income tax — an estimate based on your Form W-4 and the IRS tables in Publication 15-T.
Social Security — 6.2% of wages up to $184,500 in 2026.
Medicare — 1.45% of all wages, plus 0.9% above $200,000.
State and local income tax — where your state or city charges one; nine states do not tax wages.
State programs — for example disability or paid family leave in some states. See state payroll programs.

Bonuses are often withheld at a flat rate; see bonus tax and the bonus tax calculator.

How the amount is set

Your employer annualizes each paycheck, subtracts pre-tax deductions, applies the standard deduction built into the IRS tables and the choices you made on Form W-4 (filing status, multiple jobs, credits, extra withholding), looks up the tax in the Publication 15-T tables and divides it back into one paycheck. Nothing in that calculation knows your other income, your real deductions or your refund, which is why withholding is only an estimate. Learn each W-4 step in the W-4 guide.

Example: a $60,000 salary, paid biweekly

Single filer, no pre-tax deductions, 2026 rules, from this site's calculator.

Withheld per paycheck	Texas (no state income tax)	California
Federal income tax	$193	$193
Social Security and Medicare	$177	$177
State income tax	$0	$63
State disability insurance	$0	$30
Total withheld	$370 (16.0%)	$463 (20.0%)
Take-home pay	$1,938	$1,845

Try your own numbers in the paycheck calculator, or see the percentage at other incomes in how much tax is taken out of a paycheck.

Withholding vs the tax you owe

Withholding and your final tax rarely match exactly. If your employer withheld more than your tax for the year, you receive the difference as a refund; if less, you owe it. A large refund means you lent the government money interest-free during the year, and a large bill means too little was withheld. Neither changes what you actually owe.

How to change your withholding

Give your employer a new Form W-4. Use the IRS Tax Withholding Estimator to choose the numbers, add an extra amount on Step 4(c) to withhold more, or claim credits and deductions you are entitled to on Steps 3 and 4(b) to withhold less. Then check the effect on take-home pay in the paycheck calculator. If you are working backward from the pay you need, use the reverse paycheck calculator. This is general information, not tax advice.

Frequently asked questions

What is withholding tax?

Withholding tax is the money your employer holds back from each paycheck and sends to the government on your behalf, as an advance payment of your income tax plus Social Security and Medicare tax. It is not an additional tax.

Is withholding tax the same as income tax?

No. Withholding is the method of collecting income tax during the year. Your actual income tax is calculated on your tax return, and the amount withheld is credited against it.

Why is so much taken out of my paycheck?

Withholding covers federal income tax, 7.65% for Social Security and Medicare, and any state and local tax. Together these commonly take 15% to 30% of gross pay depending on income and state.

Can I get my withheld money back?

If more was withheld than your actual tax, the difference comes back as a refund when you file. If less was withheld, you owe the balance. Adjusting your Form W-4 changes how much is withheld going forward.

Do all states withhold income tax?

No. Nine states charge no tax on wages (Alaska, Florida, Nevada, New Hampshire, South Dakota, Tennessee, Texas, Washington and Wyoming), so only federal withholding and FICA come out of pay there.