Federal Payroll Tax

Each payroll period, you will withhold a portion of your employees' earnings to pay their estimated federal income taxes. Federal income taxes are used for national defense, law enforcement, foreign affairs and community development. The amount you withhold depends on how much money an employee earns, how often you pay them, their marital status and the amount of allowances they claim on Form W-4 -- the Employee's Withholding Allowance Certificate. You should have employees fill out this form when they began working. Publication 15, Employers Tax Guide and Publication 15-A, Employers Supplemental Tax Guide will guide you on how much to withhold for federal income tax from each individual employee each pay period.

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