What is federal tax withholding?

Federal tax withholding is an amount held from a regular employee's paycheck that goes toward his federal tax obligation. The amount an employer withholds from each paycheck is based on information provided by a worker on a W-4 form, according to the Internal Revenue Service.

When an employee's situation changes, such as from getting married or having children, he completes a new W-4 form that updates the amount of withholding, according to the IRS. Nonresident alien employees are subject to federal withholding in the same way as a U.S. citizen. Workers in a non-wage job can have extra amounts withheld through an employer or make quarterly estimated tax payments.