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Change your tax withholdings

Change your federal or state tax withholdings at any time in your Gusto account. You can use the online IRS calculator or refer to the W-4 worksheet to help you calculate your federal tax withholding allowance.

  1. Click the Job & Pay tab.
  2. Next to Federal Taxes or State Taxes, click Edit.
  3. You may update your Withholding Allowances or your Filing Status.
  4. You may also add an additional amount of wages to be withheld as Additional Withholdings.
    • The additional amount will be withheld on each payroll processed thereafter - up until the amount is removed from this section.
  5. Click Save.

​The withholding allowance number you enter will be used to calculate your federal or state withholding tax in future payrolls.

Once you've updated your withholdings, a new form W-4 will be created and you'll be prompted to e-sign.

Note: Higher withholding allowance numbers will cause less income tax withheld each payroll. If you claim ‘exempt from withholding’ as your filing status, Gusto will not withhold federal income tax from your wages but they will still be reported on the W-2.