Quick Answer
Teen workers under 18 follow the same federal tax withholding rules as adults, but may qualify for lower state minimum wages in 20+ states. Workers under 16 face strict hour limits (3 hours on school days, 18 hours per week), while 16-17 year olds have fewer restrictions but still can't work past 11 PM on school nights in most states.
Best Answer
Sarah Chen, CPA
Parents whose teenagers are starting their first jobs and need to understand the legal and tax implications
Federal tax withholding for teen workers
Teen workers follow the same federal income tax withholding rules as adults. If your 16-year-old earns $15,000 in 2026, they'll have federal taxes withheld just like any adult earning $15,000. However, teens often benefit from the standard deduction ($15,000 for single filers in 2026), meaning many won't owe federal income tax.
Key difference: Teens can claim "exempt" on their W-4 if they had no tax liability last year and expect none this year. This stops federal income tax withholding (but not Social Security/Medicare taxes).
State minimum wage differences for minors
Many states allow "youth minimum wages" below the standard rate:
For example, if your state's minimum wage is $12/hour, your teen might start at $10.20/hour for their first 90 days.
Hour restrictions by age group
Ages 14-15 (requires work permit in most states):
Ages 16-17:
Example: 16-year-old working part-time
Sarah's daughter works 15 hours/week at $13/hour during the school year:
Because she earns under $15,000, she can claim "exempt" on her W-4 to stop federal withholding from day one.
Work permit and documentation requirements
Most states require work permits (employment certificates) for workers under 18:
Required documents typically include:
Prohibited jobs for minors
Federal law prohibits workers under 18 from "hazardous occupations" including:
Most teen jobs are in retail, food service (limited roles), recreation, or office work.
What parents should do
1. Check your state's specific laws - Requirements vary significantly by state
2. Help your teen complete their W-4 - They can likely claim "exempt" if earning under $15,000
3. Obtain required work permits before the job starts
4. Monitor work hours to ensure compliance with school and legal limits
5. Keep pay stubs for tax filing - teens may need to file if they had taxes withheld
Key takeaway: Teen workers follow adult tax rules but often owe no federal income tax due to low earnings. State laws vary widely on minimum wage, hours, and permit requirements — check your specific state's Department of Labor website.
Key Takeaway: Teen workers follow adult federal tax withholding rules but can often claim exempt status, while state laws vary significantly on minimum wage (many allow youth rates 85% of regular minimum) and hour restrictions that become less strict at age 16.
Work hour limits and minimum wage rules by age group
| Age Group | School Day Hours | Weekly Hours (School) | Minimum Wage | Work Permits |
|---|---|---|---|---|
| 14-15 years | 3 hours max | 18 hours max | Youth rate allowed | Always required |
| 16-17 years | Varies by state | Varies by state | Youth rate first 90 days | Required in 30 states |
| 18+ years | No federal limit | No federal limit | Full minimum wage | Not required |
More Perspectives
Sarah Chen, CPA
Adult employees who want to understand how payroll works differently for their teenage coworkers or children
Key differences from adult payroll
The biggest surprise for most adults is that teen workers actually follow the same federal tax withholding rules. A 17-year-old earning $20,000 has the same federal taxes withheld as a 25-year-old earning $20,000.
However, teens have advantages adults don't:
State-specific variations matter more
Unlike federal taxes (which are uniform), state employment laws for minors vary dramatically. Some states like California have no youth minimum wage discount, while others allow employers to pay teens significantly less initially.
Work hour restrictions also vary:
Why this matters to adult employees
If you're training teenage coworkers, understand they may have scheduling constraints you don't. They're not being difficult — they're following legal requirements that could result in fines for both them and the employer if violated.
Also, if you have teenagers, their first paycheck might look confusing because they may have little to no federal withholding despite earning taxable income.
Key Takeaway: Teen workers follow adult federal tax rules but often owe no taxes due to low earnings, while state laws create significant scheduling and wage differences that vary by location.
Sarah Chen, CPA
Employers, family business owners, or others who need to understand the legal requirements for hiring minors
Employer compliance requirements
Hiring minors involves additional legal obligations beyond normal payroll:
Documentation requirements:
Payroll system considerations:
Family business special rules
Children working for parents' businesses have different rules:
This can create significant payroll tax savings. A parent paying their 16-year-old $10,000/year saves $1,530 in FICA taxes compared to hiring a non-family member.
Liability and insurance considerations
Minor employees may affect your:
Multi-state complications
If your business operates in multiple states, you'll need to track:
Some companies find it simpler to apply the most restrictive state's rules to all locations to avoid compliance mistakes.
Key Takeaway: Employers hiring minors face additional documentation, scheduling, and compliance requirements that vary by state, but family businesses get significant payroll tax breaks when employing their own children.
Sources
- Department of Labor Youth Employment Requirements — Federal child labor laws and hour restrictions
- IRS Publication 15 (Circular E) — Employer's Tax Guide including special rules for family employees
Reviewed by Sarah Chen, CPA on February 28, 2026
This content is for educational purposes only and is not a substitute for professional tax advice. Consult a qualified tax professional for advice specific to your situation.