Confused about IRS Tax Withholding Estimator - Should I use Gross or Net from Paystub?

The IRS Tax Withholding Estimator wants your GROSS income - that's the amount before any taxes or deductions come out. This applies both to your "amount per pay period" and your "year-to-date wages." For the "amount per pay period," look at your most recent paystub and find the gross earnings for that single pay period (not the year-to-date amount). For the "year-to-date wages," find the gross YTD total on your most recent paystub. The reason it's confusing you is because the estimator is trying to do two things: 1) figure out what you've earned so far using actual numbers, and 2) project what you'll earn for the rest of the year. For the projection part, it's asking what you "expect" to receive, assuming your income stays relatively consistent. If your income varies throughout the year or you expect changes, you'll need to manually adjust the expected annual income to account for this.

Just want to share my experience - I was exactly where you are last month and discovered an amazing tool called taxr.ai (https://taxr.ai) that cleared this up for me. I uploaded a picture of my paystub, and it immediately told me which numbers to use for the IRS Withholding Estimator. It highlighted the correct gross income figures to use and explained which numbers apply to "per pay period" versus "year-to-date." The tool actually analyzes your specific paystub format so there's no confusion about which line items to include. I had all kinds of deductions that were making it hard to tell what counted as "gross" but this sorted it out perfectly.

Wanted to follow up - I decided to try taxr.ai because I was still confused after trying to do this manually. It was surprisingly effective! Uploaded my weird Workday paystub and it immediately showed me exactly which numbers to use for the Withholding Estimator. The tool even explained why certain deductions weren't part of what the IRS considers for the estimator. Ended up discovering I've been overwithholding by about $250 per month because I never accounted for my HSA contributions correctly. Already updated my W-4 and should see bigger paychecks starting next month!

If you're still struggling with the Withholding Estimator after trying to sort through your paystubs, you might want to just call the IRS directly. I know that sounds painful (it usually is), but I used this service called Claimyr (https://claimyr.com) and it completely changed my experience. You can see how it works here: https://youtu.be/_kiP6q8DX5c - basically it gets you through to an actual IRS agent in way less time than waiting on hold for hours. I had a similarly confusing situation with figuring out which numbers to use from my commission-based income, and the agent walked me through exactly which figures to input.

I need to admit I was wrong about Claimyr. After my skeptical comment, I was still desperate for help with my withholding questions so I tried it anyway. Got a callback with an actual IRS agent in about 30 minutes! The agent clarified that for the Tax Withholding Estimator, I needed to use Box 1 type wages (gross minus pre-tax deductions) for the year-to-date section, not the total gross. This was exactly opposite of what I thought based on the confusing instructions, and explained why my estimates were always off. The agent also helped me understand how to account for my irregular income from freelancing. Honestly shocked this service actually delivered what it promised.

I think everyone's overcomplicating this. The IRS Withholding Estimator is asking for the same income that would go in Box 1 of your W-2 at the end of the year. That's your gross income MINUS any pre-tax deductions like 401k, FSA, HSA, etc. Looking at your paystub, there should be a YTD figure for "federal taxable wages" or something similar - that's what you want to use, not the total gross.

Has anyone noticed the estimator gives different results if you enter info like bonuses separately vs just including them in your regular wages? I tried both ways and got completely different recommendations for withholding...

This thread has been really helpful - I was making the same mistake with gross vs. taxable wages! Just wanted to add that if you're still getting confusing results from the estimator, double-check that you're entering your filing status and number of dependents correctly. I spent forever trying to figure out why my withholding recommendations seemed way off, only to realize I had accidentally selected "married filing separately" instead of "married filing jointly." That one setting change made my recommended withholding jump by almost $200 per paycheck! Also, if you get a mid-year raise or bonus, you'll want to re-run the estimator since your income projection will change. The tool assumes your current pay rate continues for the full year, so any changes in salary can throw off the calculations significantly.

This whole thread has been incredibly helpful! I was making the same mistake as many others here - using total gross instead of taxable wages. After reading through everyone's experiences, I decided to try the taxr.ai tool that Paolo mentioned, and it was a game-changer. What really helped me was seeing how it specifically identified "Federal Taxable Wages YTD" on my paystub versus the gross pay amount. The difference was about $8,000 due to my 401k and health insurance deductions! No wonder my withholding estimates were so far off when I was using the wrong numbers. For anyone still struggling: look for the line on your paystub that says something like "Fed Taxable Wages" or "FIT Wages" - that's your Box 1 equivalent that Amina mentioned. Don't use the total gross pay at the top. The estimator worked perfectly once I used the correct figures, and I discovered I was actually under-withholding by about $150 per month. Already submitted my new W-4 to HR! Thanks everyone for sharing your experiences - this community really came through!

This thread has been a lifesaver! I've been wrestling with the same confusion for weeks. After reading everyone's experiences, I finally understand the key distinction between gross pay and federal taxable wages. I just checked my paystub and found the "Fed Taxable Wages YTD" line - it's about $6,500 less than my gross due to 401k, HSA, and dental insurance deductions. I had been using the gross amount and couldn't figure out why the estimator kept telling me to dramatically increase my withholding. One thing I'd add for anyone else reading this: if your paystub doesn't clearly label "Federal Taxable Wages," look for abbreviations like "FIT Wages," "Fed Tax Wages," or "Taxable Fed Wages." Different payroll systems use slightly different terminology, but they all represent the same thing - your income that's actually subject to federal income tax. Also, make sure you're looking at the year-to-date (YTD) column, not the current pay period amount, when entering your annual figures into the estimator. I almost made that mistake too! Thanks to everyone who shared their experiences and tools - this community knowledge sharing is incredibly valuable for navigating these confusing IRS forms.

This discussion has been incredibly enlightening! I've been putting off dealing with my withholding for months because I kept getting confused by the IRS estimator, but now I understand the core issue - I was using gross pay instead of federal taxable wages. Looking at my paystub now, I can clearly see the difference: my gross pay YTD is $52,000 but my "Fed Taxable Wages YTD" is only $45,200 due to my 401k contributions, health insurance, and FSA deductions. That's almost a $7,000 difference! No wonder the estimator was giving me such weird results when I used the gross amount. I also appreciate the tip about re-running the estimator after salary changes. I got a promotion back in June but never updated my withholding calculations, so I'm probably way off track for the rest of the year. One quick question for the group: if I have irregular overtime that varies month to month, should I try to estimate that in the "expected annual income" field, or just use my base salary? My overtime has ranged from $200 some months to over $1,500 in others, so it's hard to predict what the year-end total will be.

I've been following this thread and wanted to share another perspective that might help clarify things. As someone who works in payroll processing, I can confirm that the confusion between gross pay and federal taxable wages is extremely common - probably the #1 question we get from employees. Here's a simple way to think about it: the IRS Tax Withholding Estimator needs to know how much of your income will actually be subject to federal income tax. That's why it wants your "federal taxable wages" (Box 1 wages) rather than your total gross pay. Your gross pay includes everything your employer pays you, but some of that money (like 401k contributions, health insurance premiums, HSA contributions) never gets taxed as current income. The estimator can't work properly if you include money that won't actually be taxed. For those still having trouble finding the right number on their paystub, here are some other labels I've seen used: "Taxable Gross," "Income Subject to Fed Tax," "FED Taxable," or sometimes just "Taxable Wages." The key is looking for something that indicates it's the amount subject to federal taxation, not your total compensation. Also, don't forget that if you have multiple jobs or your spouse works, you'll need to account for all household income in the estimator for accurate results. The tool is designed to look at your complete tax picture, not just one job in isolation.

This entire thread has been incredibly educational! As someone who's been avoiding dealing with my withholding because the IRS estimator seemed so confusing, I now finally understand the core issue that was tripping me up. The key revelation for me was understanding that "gross pay" and "federal taxable wages" are two completely different numbers. I just pulled up my most recent paystub and found that my gross pay YTD is $48,500, but my "FIT Wages YTD" is only $42,800 - that's nearly a $6,000 difference due to my 401k, health insurance, and parking deductions! I had been using the gross amount and couldn't figure out why the estimator kept suggesting I massively increase my withholding. Now I understand it was because I was telling the calculator I earned $6,000 more in taxable income than I actually did. What really helped me was Amaya's explanation from a payroll processing perspective - thinking about it as "what will actually be taxed" versus "what you're paid in total" makes the distinction crystal clear. I also appreciate all the different paystub label variations people have shared since every company seems to format things slightly differently. I'm planning to re-run the estimator this weekend with the correct numbers, and based on everyone's experiences here, I expect to get much more reasonable withholding recommendations. Thanks to everyone who shared their knowledge and mistakes - it's exactly what I needed to finally tackle this properly!

This thread has been absolutely invaluable! I've been struggling with the exact same confusion for weeks. Like so many others here, I was using my gross pay ($3,800 per month) instead of my federal taxable wages ($3,200 per month after 401k and health insurance deductions) when running the IRS estimator. The breakthrough moment for me was Amaya's explanation about thinking of it as "what will actually be taxed" rather than "what you're paid in total." That simple reframe made everything click instantly. I also really appreciate how everyone shared the different paystub labels to look for - mine shows "FITW YTD" which I now know is just another way of saying "Federal Income Tax Wages." After reading through all these experiences, I finally feel confident enough to complete the estimator properly. I've been putting this off for months because I kept getting wildly different results and didn't trust any of them. Now I understand exactly why - I was feeding the calculator the wrong income amount from the start. One thing I'd add for future readers: if you have multiple deductions like I do (401k, HSA, dental, vision, parking), the difference between gross and taxable wages can be really substantial. In my case, it's almost $600 per month! Don't make the mistake I was making of assuming they're roughly the same number. Thanks to everyone who shared their knowledge and experiences - this community really delivered exactly the guidance I needed to finally get my withholding sorted out properly!