Standard deduction
$16,100
single, built into withholding
Child credit, Step 3
$2,200
per child under 17
Overtime deduction
up to $12,500
$25,000 married joint
Safe harbor
90% / 100%
of this or last year's tax
2026 federal figures, checked against the IRS in September 2026. Worked-example amounts are PayMetric Labs' own modeled estimates.
Check what one paycheck should look like
Weekly, biweekly, semimonthly or monthly, with federal, FICA and state tax.
How W-4 withholding actually works
Your employer doesn't know your tax situation. It takes each paycheck, annualizes it, subtracts the standard deduction for the filing status you chose, runs it through the 2026 brackets and withholds that share. Everything else has to come from your W-4.
That design works well for one job. It breaks when there is income payroll can't see:
- A second job, or a spouse's job. Each employer gives you the standard deduction and the 10% and 12% brackets again, so both jobs are under-withheld.
- Freelance or 1099 income, interest, dividends or a large capital gain. Nothing is withheld on any of it.
- The reverse: a big deduction, child credits or the new overtime deduction payroll doesn't know about. You overpay all year and get it back as a refund.
The 2026 W-4, step by step
| Step | Fill it in if | What it does |
|---|---|---|
| 1. Personal information | Always | Filing status sets the standard deduction and brackets payroll uses. The exempt checkbox is here too. |
| 2. Multiple jobs or spouse works | You have more than one job at a time, or you file jointly and both work | Checkbox 2(c) halves the brackets on each job. Tick it on both W-4s only if the jobs pay roughly the same. |
| 3. Dependents | Income under $200,000 ($400,000 joint) and you have dependents | $2,200 per child under 17, $500 per other dependent. Reduces withholding dollar for dollar. |
| 4(a) Other income | Interest, dividends or retirement income with no withholding | Adds that income so tax is withheld on it through your paycheck. |
| 4(b) Deductions | You itemize, or claim the new tips, overtime, car loan interest or age 65+ deductions | Reduces withholding. Blank means the standard deduction only. |
| 4(c) Extra withholding | You want a fixed extra amount taken each paycheck | The simplest, most precise lever for a catch-up. |
| 5. Sign | Always | An unsigned form is invalid, and payroll will treat you as single with no adjustments. |
Based on the 2026 Form W-4 and its instructions on irs.gov.
Worked example: a second job with no W-4 changes
You are single, earning $90,000 in your main job, and took on a $30,000 second job at the start of the year. Neither W-4 mentions the other job. Federal income tax only, PayMetric Labs' own modeled estimate from our 2026 engine:
| Withheld by job 1 ($90,000) | $10,970 |
| Withheld by job 2 ($30,000) | $1,420 |
| Tax actually owed on $120,000 | $17,570 |
| Shortfall for the year | $5,180 |
Where does $5,180 come from? Job 2 gets a second $16,100 standard deduction and starts in the 10% bracket. In reality, every dollar of it sits in your 22% bracket.
The fix: with 7 biweekly paychecks left in the year, put $740 in Step 4(c) on your main job's W-4. In January, file new W-4s using Step 2 so next year is right from the first paycheck, and drop the 4(c) amount.
Withholding less with the new 2026 deductions
The One Big Beautiful Bill Act added deductions you can claim on your return, and the 2026 W-4's Step 4(b) worksheet lets you reflect them in your paychecks now instead of waiting for a refund:
- Qualified overtime: up to $12,500 ($25,000 joint), counting only the premium half of time-and-a-half. Phases out above $150,000 of income ($300,000 joint).
- Qualified tips: up to $25,000, same income limits, for jobs where tips are customary.
- Car loan interest: up to $10,000 on a new vehicle assembled in the US, phasing out above $100,000 ($200,000 joint).
- Age 65 and over: an extra deduction on top of the standard deduction.
Be conservative. If you put $12,500 of overtime in the worksheet and only earn $6,000 of it, you will owe the difference in April. These deductions cut income tax only. Social Security, Medicare and most state taxes are still due on the full amount.
The October check: will you owe, and will there be a penalty?
Owing money in April isn't a problem in itself. A penalty is. You avoid the underpayment penalty if what you paid through withholding (and any estimated payments) covers the smaller of 90% of this year's tax or 100% of last year's. That rises to 110% if last year's AGI was over $150,000. There is also no penalty if you owe less than $1,000 (IRS).
This is where withholding beats estimated payments. The IRS treats withholding as paid evenly through the year, even when most of it came in December. A quarterly estimated payment made in January can't fix a shortfall in April or June. Extra withholding in the last few paychecks can.
15-minute withholding check
- From your latest pay stub, note year-to-date federal income tax withheld and how many paychecks are left.
- From last year's Form 1040, note your total tax. That is your safe-harbor target (or 110% of it).
- Estimate this year's tax with the IRS Tax Withholding Estimator or our take-home calculator.
- Divide any gap by the paychecks left and enter it in Step 4(c).
- Set a calendar reminder for January to replace the 4(c) fix with a proper Step 2 setup.
W-4 questions for 2026
How do I fill out a W-4 in 2026 if I have one job and no dependents?
Complete Step 1 (name, address, filing status) and sign Step 5. Leave Steps 2 to 4 blank. Payroll will then withhold as if your only income is this job and you take the $16,100 standard deduction (single), which is right for most people in that position.
Is it too late to change my W-4 in October?
No. You can hand in a new W-4 any time, and your employer must apply it no later than the start of the first payroll period ending on or after the 30th day after you submit it. The later you leave it, the fewer paychecks you have to spread a catch-up over, so each one takes a bigger bite.
Should I use Step 2 or Step 4(c) for a second job?
For the rest of 2026, Step 4(c). A flat extra amount per paycheck lets you recover the shortfall that has already built up. Step 2 (the checkbox or the multiple jobs worksheet) is better for next year, because it corrects withholding going forward but does nothing about the months already paid.
Why does my withholding look wrong on a bonus?
Bonuses are supplemental wages. Most employers withhold federal tax on them at a flat 22% (37% on supplemental pay over $1 million), whatever your W-4 says. That can be too much or too little against your real rate. It all settles on your return. Our bonus tax calculator shows the difference.
Can I claim the new overtime deduction on my W-4?
Yes, through the Step 4(b) deductions worksheet on the 2026 form. You can include up to $12,500 ($25,000 married filing jointly) of qualified overtime, which means only the extra half of time-and-a-half pay that the Fair Labor Standards Act requires. It phases out as income rises above $150,000 ($300,000 joint). It lowers income tax only, not Social Security or Medicare.
Can I claim exempt from withholding?
Only if you owed no federal income tax last year and expect to owe none this year. The 2026 form has a checkbox for it. An exempt W-4 expires, so you must file a new one by February 15 next year to keep it.
Does my W-4 change my state tax withholding?
Usually not. Many states have their own form, such as California's DE 4, and some use the federal W-4 with their own rules. Check your state's form separately if you are moving or adding a job in a different state.
My spouse and I both work. What should we do?
Filing jointly with two incomes is the classic under-withholding trap, because each employer gives you the full married brackets. For next year, both of you can tick Step 2(c) if your pay is similar, or one of you can use the multiple jobs worksheet. For this year, add a Step 4(c) amount on the higher-paid job.
Methodology and limits
Form details come from the 2026 Form W-4 and instructions, and penalty rules from the IRS underpayment penalty page, checked in September 2026. Tax figures use PayMetric Labs' 2026 federal engine: single filer, $16,100 standard deduction, 2026 brackets under IRS Rev. Proc. 2025-32.
The example treats each employer's withholding as a full-year single-job calculation. Real withholding tables round per paycheck and can differ by a few dollars. It ignores state tax, pre-tax 401(k) contributions and credits. This is general information, not tax advice.
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