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There are two common methods for calculating an employee's federal income tax withholding:

1. Ìý

   •ÌýÌýÌýÌý Percentage Method Tables for employers with automated payroll systems, or

2. Ìý

   •ÌýÌýÌýÌý Wages Bracket Method Tables for employers with manual payroll systems

Annual tax rates for 2024 can be found here. The planned adjustments for inflation in 2025 can be found here.

Percentage Method Tables

An employer that uses an automated payroll system will use the Percentage Method Tables. The employer will calculate the wage withholding using Worksheet 1A and the Percentage Method tables in Publication 15-T from the IRS.

Due to the complexities related to operating a US payroll, many employers will find that using an automated payroll system, whether through an internal system or by using a payroll service, is their most efficient option.

Wage Bracket Method Tables

An employer that computes payroll manually is able to use the Wage Bracket method. The employer will use the worksheet and Wage Bracket Method Tables found in Publication 15-T to figure federal income tax withholding. (Publication 15-T (2024),