What are the withholding rates on payroll taxes?

The withholding rates on payroll taxes are based on two things, the amount an employee earns and the information provided by the employee on Form W-4, according to the Internal Revenue Service. The employee provides three types of information on Form W-4 that dictates withholding rates.

If the employee files as a single taxpayer, the employer withholds taxes at higher rates than if he files as married, reports the IRS. The employee also calculates and submits the number of allowances he wants to claim for withholding purposes. An employee may also request that additional taxes be withheld on Form W-4. U.S. federal income tax is a pay-as-you-go tax, and the withholding system is part of that framework.