Employee withholding refers to the process where an employer deducts a portion of an employee's earnings for taxes before the employee receives their paycheck. This amount typically includes federal income tax, state income tax, and contributions to programs like Social Security and Medicare. The goal is to ensure that employees meet their tax obligations throughout the year rather than paying a lump sum at tax time. Employers use Form W-4 to determine the correct amount to withhold based on the employee's filing status and allowances. Employees can adjust their withholding by submitting a new W-4 if their financial situation changes, such as getting married or having a child.