How does Quickbooks figure out how much Federal Income Tax to withhold on a W-2 employee's wages?

Hello there, @advancedanes.

Allow me to share some information on how QuickBooks calculate  Federal Income taxes.

QuickBooks Online Payroll uses the percentage method which applies to federal, state, and local income taxes. 

Income taxes are determined by your employee's W-4 info such as:

• Employee's filing status
• Number of allowances or extra withholding amount in the employee setup
• Pay frequency
• Gross wage in a given pay period

To learn more about Federal Income Tax Withholding tables, refer to IRS Pub 15-T.

With the State and Local Income Taxes, its calculation varies per state. There may be local income taxes in some states but not in others. For more on the withholding tables for each state, visit the Payroll Compliance pages.

Note that taxes on federal or state income often display $0.00. This is typical if the employee's gross pay is insufficient or there aren't enough earnings to reach the required minimum. See IRS Publication 15-T to discover the minimal criteria for federal withholding. Visit the website of your state's withholding agency for information.

You can visit this article to know more about how QuickBooks calculate taxes and to know about the payroll tax table update: Understand how your payroll taxes are calculated.

Additionally, I've included an article that'll help you in case you want to view payroll tax payments and forms: Access payroll tax forms and tax payments in QuickBooks Online.

If I can be of any additional assistance regarding taxes in QuickBooks, please don't hesitate to insert a comment below. Stays safe.