Business & Finance Taxes

How to Calculate Federal Withholding

    • 1). Check your W-4 form to determine how many personal allowances you claimed. Each allowance will reduce the amount of income subject to income tax withholding.

    • 2). Consult IRS Publication 15 to find the value of your personal allowances per pay period. For example, for 2010, if you are paid weekly, each allowance decreases your withholding by $39.42.

    • 3). Multiply the number of allowances claimed by the value of the allowances. In this example, if you claimed three allowances, you would multiply $39.42 by 3 to find the total value of your allowances would be $118.26.

    • 4). Subtract the value of your allowances from your paycheck. In this example, if you made $900 per week, you would subtract $118.26 from $900 to find your income subject to withholding to be $781.74.

    • 5). Use the income tax withholding tables found in IRS Publication 15 to calculate your federal income tax withholding based on whether you are single or married. In this example, if you were single, you would have $104.54 withheld.

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