Federal Income Tax

• Your federal income tax withholding depends on various factors, including your W-4 data and the Internal Revenue Service withholding tax tables shown in IRS Circular E. To arrive at your withholding amount, your employer obtains your filing status and allowances from your W-4 and uses the withholding tax table relevant to your wages, filing status, allowances and pay period. Consequently, your federal income tax withholding is usually not based solely on how much you make. You can use the Circular E for the appropriate tax year to figure out your withholding based on your earnings, filing status and allowances. For example, if you earn less than $55, claim single with zero allowances and are paid weekly in 2011, you pay no federal income tax; but if you earn at least $55 to $60, you pay $2 (see page 38 of the Circular E).
  
  

FICA Taxes

• Medicare and Social Security taxes are based on flat percentages -- 4.2 percent and 1.45 percent, respectively, as of 2011. They are withheld from all wages, except if you have reached the annual wage base for Social Security tax -- $106,800 for 2011. No matter how small your earnings, you will have a deduction for FICA taxes. For example, if you earn $100 biweekly, your Social Security tax is $4.20 ($100 x .042).
  
  

State Income Tax

• Most states require employees to pay state income tax according to the state revenue agency's guidelines. In many instances, a system similar to federal income tax withholding is used to figure state income tax. In this case, your state income tax withholding depends on your wages and allowances or exemptions, and in some cases, filing status and pay period. Consult your state withholding tax table to know your withholding amount based on your withholding conditions. If the state charges a flat percentage, such as Pennsylvania, you will have a deduction, unless you have no earnings.
  
  

Additional Taxes

• Depending on where you live, you may be required to pay city and/or local income tax. The withholding rules vary by jurisdiction. For example, you would use Publication NYS-50-T New York State, New York City, and Yonkers Withholding Tables and Methods to know the amount you have to make so no New York City income tax is withheld from your paychecks; but Ohio school district tax may be based on a flat percentage of your pay or on the school district withholding tax tables.