What part of employment income is withheld for tax purposes?

Withholding from employment income is primarily based on the employee’s projected tax liability for the year and is determined by tax brackets. Employers are required to withhold a portion of an employee's wages based on the employee's income level and applicable tax rate, which is designed to match what the employee is likely to owe in federal income taxes.

This withholding is calculated using information provided by the employee on Form W-4, which includes their filing status and allowances. The IRS provides tax tables that help employers determine the correct amount to withhold from each paycheck, ensuring that only a proportionate amount of income is subject to withholding rather than the entire sum. This system allows employees to contribute towards their tax liability gradually throughout the year, relieving the burden of a large tax bill when filing their annual return.

The other options represent misconceptions: withholding the entire amount would not allow employees access to their earnings, only withholding bonuses ignores regular income which also incurs tax, and saying no amount is withheld contradicts tax law which mandates withholding for wage earners. Therefore, the approach of withholding a portion based on tax brackets accurately reflects the graduated nature of the federal tax system, providing both fairness and compliance with tax regulations.