Your Paycheck: Withholding and the W-4 for Nonresidents

Your offer letter quoted a salary; your first paycheck is noticeably smaller, and the gap may not match what colleagues told you. Part of the difference is taxes everyone pays. Part is specific to visa holders: a nonresident fills in Form W-4 under special rules, and the employer deliberately withholds more. This chapter walks from gross pay to take-home pay, explains the nonresident W-4 line by line, and shows how a 401(k) contribution changes the numbers.

From gross pay to take-home pay

Every paycheck is gross pay minus four kinds of deductions:

1. Pre-tax deductions such as a traditional 401(k) contribution and health insurance premiums. They lower the wages your income tax is figured on.
2. Federal income tax withholding, set by the IRS tables and your Form W-4.
3. Social Security and Medicare (FICA), unless you are an exempt F-1 or J-1 nonresident (chapter 4).
4. State and sometimes local income tax, with the state's own withholding form.

Withholding is an estimate, not the final tax. The final figure comes from your return the following spring: if too much was withheld you get a refund, and if too little you owe the difference. The goal of a well-filled W-4 is to land close to zero.

Your tax at a sample salary

Here is the 2026 federal income tax for a single filer on a salary, figured as it would be for a resident alien:

On $110,000, the standard deduction of $16,100 leaves $93,900 taxable, and the federal income tax is $15,370, about 14.0% of gross pay. The last dollars fall in the 22.0% bracket.

A nonresident alien earning the same salary pays the same brackets but cannot take the standard deduction (Publication 519), so all $110,000 is taxable. The extra $16,100 of taxable income is taxed at the highest rates the salary reaches, 22.0% or more, which is why a nonresident's tax on the same pay is higher. Students and business apprentices eligible for Article 21(2) of the US–India tax treaty are the main exception: they may claim the standard deduction, so the resident figure above is close to theirs.

The W-4 when you are a resident alien

If you are a resident alien for the year, you fill in Form W-4 exactly as a citizen does: your real filing status, a spouse's job in Step 2 if you will file jointly, dependents in Step 3, and other adjustments in Step 4. The IRS Tax Withholding Estimator works for you.

The W-4 when you are a nonresident alien

Nonresidents follow IRS Notice 1392, Supplemental Form W-4 Instructions for Nonresident Aliens, because their filing status, deduction and credits are restricted. The key lines:

• Step 1(b): Social Security number. An SSN is required; an ITIN cannot be used on Form W-4. If you are still waiting for your SSN, chapter 6 explains what to do.
• Step 1(c): filing status. Check Single or Married filing separately, whatever your actual marital status.
• Step 2: other jobs. Complete it only if you hold more than one job at the same time. Do not account for a spouse's job, because nonresidents cannot file jointly.
• Step 3: dependents. Leave it blank unless you are from Canada, Mexico, South Korea or India and may qualify for the child tax credit or the credit for other dependents.
• Step 4(b): deductions. Enter only itemized deductions and adjustments you expect to be allowed as a nonresident.
• Step 4(c): write "Nonresident Alien" or "NRA" in the space below the line, and add any extra withholding you want.
• Do not claim exemption from withholding, even if you seem to meet the conditions in the regular W-4 instructions.
• Do not use the IRS Tax Withholding Estimator. Notice 1392 says nonresident aliens should not use it.

Why your employer withholds more on purpose

The IRS withholding tables quietly build in the standard deduction. Because a nonresident cannot claim it, Publication 15-T tells employers to add an amount to a nonresident's wages before looking up the withholding, only for the calculation. For a Form W-4 from 2020 or later, the 2026 amount is $16,100 a year, or $619 per biweekly paycheck, which equals the 2026 single standard deduction of $16,100.

The added amount never appears on your Form W-2, does not increase your actual tax, and does not change your Social Security or Medicare tax. It simply makes the withholding match a tax figured without the deduction. Students and business apprentices from India covered by Article 21(2) are excluded from the adjustment.

Bonuses are handled differently. An employer may withhold a flat 22% on a bonus or other supplemental pay, and the nonresident adjustment does not apply when the flat rate is used. If your real top rate is higher, the flat rate under-withholds and the difference is due with your return. The bonus tax calculator shows the gap.

Treaty exemptions: Form 8233 instead

Some tax treaties exempt part or all of a student's, teacher's or researcher's US pay for a limited period. If you claim a treaty exemption from withholding on that pay, Notice 1392 says to give each employer Form 8233 (with the treaty statement from the appendices of Publication 519) instead of relying on Form W-4 for that income. The employer may still withhold if it cannot confirm you qualify until after the year ends; in that case you recover the excess by filing Form 1040-NR. Treaty terms vary by country, so read your country's article before filing the form.

How a 401(k) contribution changes the picture

A traditional 401(k) contribution comes out before federal income tax, so it lowers the tax as well as the paycheck. It does not lower Social Security and Medicare tax.

Contributing $12,000 for the year cuts taxable income to $81,900 and the federal income tax from $15,370 to $12,730. For a nonresident the saving per dollar is about the same, because it comes off the top of the income at the same marginal rate. Chapter 7 covers the question visa holders actually face here: whether it is worth contributing if you might leave the US.

When your status changes, refile

If you become a resident alien during the year, you are no longer bound by Notice 1392. Give your employer a new Form W-4 completed as a resident, so the extra withholding stops and your real filing status is used. Do the same with the state form. If you switch employers, a new W-4 is needed anyway.