The IRS form employees complete to tell their employer how much federal income tax to withhold from each paycheck.
Form W-4 is the document employees use to communicate their federal income tax withholding preferences to their employer. The form was substantially revised in 2020 to replace "allowances" with a more direct approach: dependents, deductions, additional withholding, and multi-job adjustments.
Employees update W-4 forms whenever their tax situation changes — marriage, new dependents, second job, large deductions. Employers must implement the new W-4 within a reasonable period (typically the next payroll run).
In a PEO arrangement, the PEO's HRIS system typically allows employees to update W-4 electronically. Best practice is annual reminders during open enrollment to review W-4 accuracy.
The IRS form employees complete to tell their employer how much federal income tax to withhold from each paycheck.
Form W-4 is the document employees use to communicate their federal income tax withholding preferences to their employer.
Most PEO buying decisions touch several related concepts at once. Form W-4 (Employee's Withholding Certificate) typically comes up alongside the other terms in this category. Closely related terms include Form W-2 (Wage and Tax Statement), Payroll tax.
This is one entry from our PEO glossary covering payroll, benefits, workers comp, HR compliance, and PEO mechanics. Browse all terms.
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