Q. Do you know what the federal withholding tax percentage is these days? I’ve heard it used to be 25 percent, but with the tax cuts in 2018 is it now lower? I’m retiring on 12/31/18 and trying to guesstimate how much will be taken out of my annual leave lump sum payment, which will be for 388 hours of leave. Is the withholding percentage determined independently by each federal agency?
A. Tax withholding from an employee’s paycheck is not a flat rate, but is computed using a formula that depends upon your marital status and the number of allowances you have claimed in your IRS Form W-4 on file with your employer.
