Form W-4: What Employers Need to Know
(2026 Guide)

Introduction:

Form W-4, which is also called the “Employee's Withholding Certificate,” helps employers how much federal income tax to take out of workers' paychecks.

For Employers, it's important to understand Form W-4. It ensures that IRS rules are followed, taxes are withheld correctly, and handling paystubs goes smoothly.

This guide explains what Form W-4 is, how it works, and what businesses need to do to follow the rules and help their employees.

What is a W-4 Form?

Form W-4, also called the Employee’s Withholding Certificate, is an IRS-required form that employees must fill out and give to their employer. It provides businesses how much federal income tax to take out of each employee's paycheck.

When Form W-4 is filled out correctly:

• Employees avoid underpaying or overpaying taxes
• Employers withhold the correct amount of federal income tax
• Payroll and paystubs stay accurate and IRS-compliant

Key Sections of Form W-4

Form W-4 has been divided into several parts. They all have an impact on how the federal income tax is determined.

1. Personal Information

Employees provide:

• Full legal name
• Address
• Social Security number (SSN)

Employers can use this information to correctly identify the worker in payroll records.

2. Filing Status

Employees must select one filing status on Form W-4:

• Single or Married Filing Separately
• Married Filing Jointly
• Head of Household

The chosen filing status affects:

• Tax brackets
• Standard deductions
• Amount of tax withheld

3. Multiple Jobs or Working Spouse

This section applies if:

• he employee has more than one job, or
• Their spouse also earns income

Completing this section helps prevent under-withholding or over-withholding taxes.

4. Dependents and Other Credits

Employees report dependents and other tax credits:

• Qualifying children under 17: multiply by $2,200
• Other dependents: multiply by $500
• Add any other credits

This helps reduce withholding eligible tax credits.

5. Other Adjustments

The workers can make further adjustments:

• Other income: interest, dividends, retirement income
• Deductions: above standard deduction
• Extra withholding: additional tax per pay period

6. Signature and Date

The workers can make further adjustments:

• The form is valid only when signed and dated.
• The signature confirms that the information is accurate.

Why Form W-4 Is Important

Form W-4 ensures accurate federal income tax withholding.

For Employees

• Helps employees avoid paying too much or too little tax during the year
• Prevents unexpected tax bills at tax time
• Reduces the chance of receiving large, unexpected refunds

For Employers

• Ensures accurate federal income tax withholding from employee paychecks
• Keeps the company compliant with IRS regulations
• Helps maintain correct payroll and tax records

2020 and Later W-4 Updates: Pre- vs. Post-2020

Key Takeaway: The 2020 redesign simplifies withholding calculations and removes allowances, making tax withholding more accurate.

Employee Responsibilities

Employees must:

• Complete Form W-4 accurately
• Submit it during onboarding
• Update it after life changes such as:
• Marriage or divorce
• Birth of a child
• Second job
• Major income changes

Employees can use the IRS Tax Withholding Estimator for guidance.

Employer Responsibilities

Employers are responsible for proper W-4 handling.

Employer duties include:

• Giving new hires Form W-4
• Collecting completed forms
• Storing W-4 records securely
• Updating payroll systems
• Withholding correct federal income tax
• Reflecting W-4 data accurately on paystubs

Failure to follow these steps may result in IRS penalties.

How Employers Can Assist Employees

Employers can help their workers by:

• Describe how Form W-4 works
• Sharing tools and information from the IRS
• Encouraging updates after life changes
• Suggesting professional tax advice when needed

Clear guidance helps prevent payroll issues later.

Conclusion:

Form W-4 plays a critical role in payroll accuracy and tax compliance. By understanding how the form works and staying updated on IRS changes, employers can:

• Ensure correct tax withholding
• Reduce payroll errors
• Support employees effectively

Keeping track of W-4 forms and paystubs is easy, correct, and stress-free with tools like SecurePayStubs.

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• Easy Information Entry: Quickly input employee details, and give W-4 information pre- 2020 and 2020, for accurate paystub calculations.
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• Compliance and Transparency: Supports both old and new W-4 structures

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This article was last updated on February 2, 2026.