IRS Publication 15: Employer's Tax Guide: Overview
IRS Publication 15 (Circular E) contains important employer tax information on withholding, depositing, reporting, and paying FICA, FUTA, income tax, wage thresholds, and employer obligations.
- irs publication 15-t
- irs publication 15-t 2025
- IRS Publication 15, (Circular E)
What Is the IRS Publication 15?
An important tool provided by the Internal Revenue Service (IRS) to assist employers in understanding their tax obligations is IRS Publication 15, also referred to as the Employer’s Tax Guide. Businesses must follow the guidelines in this publication regarding employee tax reporting and withholding. Even though it doesn’t address taxes that the company itself owes, it’s crucial reading for proper payroll management.
This guide, also known as Circular E, guides employers through the entire employee tax handling process.This covers the proper way to report taxes, when and how to deposit them, and how to withhold taxes from paychecks. It also describes how to pay and fixes any mistakes if necessary.
Furthermore, IRS Publication 15 offers precise instructions on how to compute Medicare and Social Security contributions, which are essential elements of payroll tax compliance, as well as federal income tax withholding.
Understanding IRS Publication 15
Although it doesn’t apply to state or local taxes, IRS Publication 15, commonly referred to as the Employer’s Tax Guide, is a crucial tool for figuring out federal income tax withholding. Important information for employers, such as how much to deduct from employee wages for Social Security, Medicare, and federal income tax, is outlined in this guide. To guarantee correct paycheck deductions, employers must consult their state tax authorities regarding state-specific tax laws.
The IRS also provides a supplemental guide, IRS Publication 15-A, which includes more intricate employment tax scenarios and clarifications, to offer more payroll insights.
Important Updates to IRS Publication 15
In previous versions of IRS Publication 15, one of the most referenced sections was the inclusion of Percentage Method Tables and Wage Bracket Method Tables for calculating income tax withholding. These tables helped employers accurately determine how much tax to withhold based on employee earnings and filing status.
These important tables, however, have been transferred to a different document, Publication 15-T, Federal Income Tax Withholding Methods, as of the 2020 edition. This change guarantees more dynamic and thorough computations that conform to recent modifications to tax laws.
The IRS offers an online tool called the Income Tax Withholding Assistant for Employers to help employers even more. The process of determining precise withholding amounts based on the updated tax tables in Publication 15-T is made easier by this intuitive digital assistant.
How to Use IRS Publication 15
Usually, the IRS website is the most convenient way to obtain IRS Publication 15. The following sections, as well as any updates or new laws that affect employers, are included in the Employer’s Tax Guide:
- Information about Employer Identification Numbers, or EINs
- Legal definitions of employees
- Hiring and paying family employees
- Employee’s Social Security Numbers or SSNs
- Wages and other compensation details
- How to report and pay tips
- Any supplemental wages
- Payroll Periods
- Withholding from employee’s wages
- Required notice to employees about the earned income credit or EIC
- Depositing taxes
- Filing Form 941 or Form 944
- Reporting Adjustments to Form 941 or Form 944
- Federal Unemployment, or FUTA, Tax
FAQs
1. What is IRS Publication 15 (Circular E)?
Publication 15, also known as Circular E, is the IRS guide outlining an employer’s responsibilities—such as withholding, depositing, reporting, and paying employment taxes (federal income tax, Social Security, and Medicare)—but it does not cover corporate taxes.
2. How are workers classified under Publication 15?
The publication explains how to distinguish between different worker types: common‑law employees, independent contractors, statutory employees, and statutory nonemployees. Proper classification determines which employment taxes must be withheld and remitted.
3. How do employers calculate and report federal payroll taxes?
Employers must withhold federal income tax, Social Security tax (6.2%), and Medicare tax (1.45%) from employee wages and also contribute matching shares. These amounts are reported on IRS forms such as Form 941 (quarterly) or Form 944 (annually).
4. What is Form 941, and when is it filed?
Form 941 is the Employer’s Quarterly Federal Tax Return. It’s used to report federal income tax withheld from employees and both the employer and employee portions of Social Security and Medicare taxes. Generally, it must be filed quarterly.
5. What is Form 940, and who must file it?
Form 940 is the Employer’s Annual Federal Unemployment (FUTA) Tax Return. Employers use this form to report and pay their annual unemployment tax liability.
The Bottom Line
The guidelines for withholding federal income tax, Social Security, and Medicare taxes are outlined in IRS Publication 15, commonly referred to as Circular E, which is a crucial resource for American employers. Adhering to the publication helps prevent IRS penalties and guarantees accurate payroll processing. Regardless of your role—payroll manager or small business owner—reviewing this document on a regular basis keeps your company compliant with the most recent tax laws.
