A newly hired employee who is married with two children fails to complete Form W-4 by the first payday. What withholding status does the employer use when calculating the employee's withholding?

When a newly hired employee does not complete Form W-4 by the first payday, the Internal Revenue Service (IRS) requires employers to use a default withholding status. In this situation, the employer must withhold taxes using the "Single, 0 allowances" status. This means that for withholding purposes, the employer treats the employee as if they are single and not claiming any allowances.

This approach is designed to ensure that the employer withholds at least a minimum amount of taxes, which helps to prevent under-withholding that could result in tax liability for the employee at the end of the tax year. It is crucial for employers to follow this protocol as it aligns with IRS regulations and helps maintain compliance.

In contrast, if the employee had completed the form, the withholding status would have been determined based on their marital status and number of dependents. However, without the completed Form W-4, the IRS guidelines specify the use of a conservative withholding method, which is why "Single, 0 allowances" is the mandated option.