Federal income tax is calculated based on several important factors. The prime factor is the gross semi-monthly income then marital status and amount of withholding allowances, also called exceptions. There are also reductions such as the Public Employees Retirement Systems or TIAA/CREF retirement contributions, according to Washington State University.
For example, as of 2015, a single man with no withholding allowances or reductions who earns between $3,817 and $7,858 on a semi-monthly basis would have to pay $75.60 plus 15 percent in federal income task. The W-4 Withholding Certificate should be reviewed yearly to ensure that the proper amount of withholding is being deducted. Tables of values for income tax brackets can be found on the Washington State University website.
In the United States, federal income tax liability is calculated on a progressive basis, explains the Internal Revenue Service. This means that as you earn more income, higher earnings are subject to be taxed at a higher percentage. Earnings from income is therefore grouped into brackets that are determined by the IRS. Only the money that is earned within a particular tax bracket is subject to that particular tax rate, and it does not apply retroactively.