Definition
Federal income tax is the tax levied by the federal government on your taxable income. It's progressive — meaning different portions of your income are taxed at different rates as they fall into successive tax brackets. In 2026, rates range from 10% on the lowest income to 37% on income above $626,350 (single).
The tax is calculated on your taxable income (gross income minus deductions), not your gross wages. Most employees pay roughly 12–22% of their gross wages in federal income tax, though the actual percentage depends heavily on deductions, credits, and other adjustments.
Federal income tax is what your W-4 controls. FICA taxes (Social Security and Medicare) are separate and not affected by W-4 instructions.
How this affects your W-4
Your W-4 instructions tell your employer how much federal income tax to withhold each paycheck. The calculator uses IRS Publication 15-T tables to calculate the correct withholding based on your inputs.
The 2026 OBBBA deductions (tips, overtime, senior bonus, auto loan interest) reduce only federal income tax withholding — not FICA taxes.
See how federal income tax affects your withholding
Use the free W-4 calculator to calculate your exact withholding with your specific situation.
Open the W-4 Calculator →