W-4 form: what it is and how each step sets your withholding

The five steps on the form

1. Personal information and filing status. Single or married filing separately, married filing jointly, or head of household.
2. Multiple jobs or a working spouse. Without this step, two jobs often means too little withholding, because each employer withholds as if its job were your only income.
3. Dependents. Credits that cut withholding.
4. Other adjustments. Other income, deductions beyond the standard deduction, and any extra amount per paycheck.
5. Sign and date.

The employer keeps the W-4; it is not sent to the IRS. Payroll software turns the entries into a withholding amount using the IRS tables each pay run. If a new hire never turns one in, Publication 15 tells employers to withhold as if the employee were single or married filing separately with no other entries.

Example: a bonus and the W-4

Bonuses are supplemental wages. An employer can withhold federal income tax on them at a flat 22% (37% on supplemental pay over $1 million in the year), per IRS Publication 15 for 2026. On a $5,000 bonus that is $5,000 x 22% = $1,100, plus $310 Social Security and $72.50 Medicare. When the flat rate is used, the W-4 does not change the $1,100. Regular paychecks follow the W-4.

To see how withholding moves an employee from gross pay to net pay, see those two terms.

When to fill out a new W-4

The IRS suggests a new W-4 each year and whenever your situation changes: marriage, a second job, a child, or a large refund or balance due last spring. States with an income tax may use their own withholding form, so a new hire there can fill out two. For an employer, collecting the W-4 is one of the first-day steps in hiring your first employee, along with the Form I-9.

The W-4 is a different form from the Form W-2, but the federal income tax withheld that the W-2 reports for the year comes from the W-4 entries. A contractor fills out a W-9, not a W-4. Full-service payroll software collects W-4s online during onboarding.