Federal Income Tax Definition

Federal income tax is a progressive tax on an employee’s income imposed by the federal government.

Federal Income Tax Extended Definition
Federal income tax is a tax on income and is imposed by the U.S. federal government. Employers must collect federal income tax through a withholding process where they deduct the tax from the employee’s wages.

Employers must follow the IRS-determined tax schedule to submit timely taxes. Unlike individual taxes, federal tax filing for employers does not occur yearly but throughout the year. Withholding federal income tax is a multi-layered process, unlike Medicare and Social Security, which are based on a flat percentage.

Related Article
The Employer’s Guide to Federal Income Tax

Last Updated By

Rachel Blakely-Gray | Apr 14, 2023

Check out Our Payroll Software

See a Demo

Back to Top