Your First Job W-4 Could Overwithhold $1,006 if You Start in June

Through May 8, the IRS had issued about 99 million refunds this year, averaging $3,276 each, according to its filing season statistics. A lot of new graduates will join that club next spring without meaning to, and the reason has nothing to do with how they fill out their first job W-4. Payroll software assumes every paycheck you get is one of 26 you’ll get all year. Start in June and that assumption is off by about half.

You can ask payroll to withhold differently, and if they refuse, you can adjust the W-4 yourself. Neither fix matters as much as the benefits enrollment deadline that starts on your first day. The numbers below use a hypothetical $62,000 salary and the actual 2026 tax tables.

Why a June start breaks the payroll math

Payroll systems follow IRS Publication 15-T, and the standard method in it, Worksheet 1A, takes your gross pay for the period and multiplies it by the number of pay periods in a year. A biweekly check of $2,384.62 gets treated as a $62,000 annual salary. The software then knocks off $8,600 (for a single filer who leaves Step 2 blank), runs the result through the 2026 withholding table, and divides by 26.

That’s fine for someone who works January through December. For a grad who starts June 15, it’s withholding as though you’ll earn $62,000 when you’ll actually earn about $33,000. Because the tax brackets are progressive, the extra imagined income lands in the 12% bracket instead of the 10% bracket or the zero zone created by the standard deduction. Payroll withholds as if you were a full-year earner, on roughly half a year of pay.

A worked first job W-4 example: $62,000 starting June 15

Say you take a $62,000 job paid every other Friday, start Monday, June 15, 2026, and get your first check June 26. You had no other income this year, you’re single, and you fill out only Step 1 of the W-4. That puts 14 paychecks in 2026, the last one on Christmas Day, for total wages of $33,384.68.

Running each $2,384.62 check through the 2026 Pub 15-T table gives $202.31 of federal income tax withholding per check, or $2,832.34 for the year. Payroll is effectively collecting toward a $5,260 annual bill, which is exactly what someone earning $62,000 all year would owe.

Your real 2026 bill is smaller. Subtract the $16,100 standard deduction for single filers (set in Rev. Proc. 2025-32) from $33,384.68 and you have $17,284.68 of taxable income. The first $12,400 is taxed at 10%, which is $1,240, and the remaining $4,884.68 is taxed at 12%, which is $586.16. Total liability: $1,826.16.

Standard withholding overshoots the actual bill by $1,006.18, about $72 a check. Your withholding covers 155% of what you owe. You’ll get it back next spring, but you’ll get it back after you’ve already paid a security deposit, a first month of rent, and maybe put a few work outfits on a credit card.

Social Security and Medicare taxes don’t change in any of this. They’re a flat 7.65% on every dollar and you won’t get any of that back.

The part-year method is the fix nobody uses

Section 6 of Pub 15-T describes an alternative called the part-year employment method. Instead of annualizing each check, payroll adds up what you’ve earned so far, spreads it over the pay periods since the later of your last job or December 31, and withholds on that average. In the example, the 166 days between December 31 and June 15 count as 11.86 extra biweekly periods. The first four checks have no federal withholding at all, the fifth has $148.51, and the rest run between about $176 and $202. The total comes to $1,838.18, just $12.02 above the actual bill.

The catch is paperwork. You have to request the method in writing, under penalties of perjury, and the request must include the last day you worked for any employer this calendar year, a statement that you use a calendar-year tax period, and a statement that you reasonably expect to be employed by all employers for no more than 245 days this year. A June 15 start through December 31 is 200 days, so a typical graduate qualifies. But if you held a campus job from January through May, those days count toward the 245, and you’ll probably go over.

The second catch is bigger. The regulation behind this method, Treasury Regulation 31.3402(h)(4)-1, says the employer “may” use it. Your employer doesn’t have to. Many payroll providers don’t support it. I’d still send the one-page request in your first week. The worst they can say is no.

Plan B: put the gap on the W-4 yourself

If payroll says no, you can get most of the same result through the form you’re already filling out. Step 4(b) of the W-4 lets you enter deductions beyond the standard deduction, and the withholding formula subtracts that number before applying the table. In the example, entering about $15,570 in Step 4(b) brings 14 checks of standard withholding roughly in line with the $1,826 you’ll actually owe. Pub 15-T tells employers to point workers who will work “only part of the year” to the IRS Tax Withholding Estimator, so use that tool to get the number for your own pay rather than copying mine.

This only works if you remember to undo it. Your first full year starts in January 2027, and a Step 4(b) entry that made sense for 2026 would leave you badly underwithheld for 2027. So, set a calendar reminder to file a clean W-4 in early January. If that sounds like more hassle than it’s worth, taking the refund is fine as long as you chose it. My filing status guide covers the Step 1 choice if you’re unsure what to check.

The benefits enrollment window is the deadline that costs more

The W-4 problem costs you the use of about $1,000 for a few months. A missed benefits enrollment window costs you a lot more. Employers typically give new hires a fixed window, commonly around 30 days from the start date, to choose health coverage and other benefits. Find the exact date in your onboarding packet. Miss it and you generally wait for the company’s next open enrollment, which at many companies happens in the fall for coverage starting January 1.

There’s one federal backstop. The Department of Labor explains that under HIPAA, if you declined your employer’s plan because you had other coverage and then lose it (or you get married or have a baby), you get a special enrollment right. You must request enrollment within 30 days of the loss of coverage or life event. For grads, a student health plan ending after graduation or aging off a parent’s plan at 26 counts as losing coverage. If your student plan runs through August, mark the date it ends, because the 30 days start then.

Don’t assume the default choice is the right one either. The Bureau of Labor Statistics found that in March 2025, 72% of private-industry workers had access to employer medical coverage, but only 63% of those with access actually enrolled. If your employer offers a high-deductible plan with an HSA, my HSA guide explains when that pairing makes sense for someone who rarely sees a doctor.

Get the full 401(k) match before you optimize anything else

The same BLS survey found that 72% of private-industry workers had access to a retirement plan, and 27% of them didn’t participate. If you’re one of the 27% and your employer offers a match, you’re giving up part of your pay. Vanguard’s How America Saves 2025 report found that the average promised match in plans that offer one is 4.6% of pay, with a median of 4%. It also found that 61% of plans auto-enroll workers, so check your default rate against the match formula rather than assuming payroll picked the right number.

Using the example’s numbers, contributing 6% of each $2,384.62 check comes to $143.08 per check, or $2,003.12 over the 14 paychecks in 2026. If your employer matches 50 cents per dollar on the first 6% of pay, it would add $1,001.54. That’s about the same size as the over-withholding. The difference is that a skipped match never shows up as a refund. A traditional pre-tax contribution also lowers your taxable wages, which reduces both your actual tax and your withholding. Check whether your plan has a vesting schedule, and know the 2026 employee limit is $24,500, which is far above what any June hire is likely to contribute.

What I’d do in week one

The first job W-4 gets most of the attention, and for a June starter it’s the least expensive thing to get wrong. Fill out Step 1, send payroll the part-year request, and if they decline, either use the IRS estimator to set a Step 4(b) entry you’ll reverse in January or accept a refund of roughly $1,000 knowingly. Then put these dates on your calendar: your plan’s enrollment deadline, the day your student or parental coverage ends, and the contribution rate that gets you the full match. Withholding rules and plan terms vary, so a tax professional or your HR benefits contact can confirm how they apply to you.

Sources: IRS Publication 15-T, IRS Rev. Proc. 2025-32, U.S. Department of Labor, Bureau of Labor Statistics