Federal income tax is determined based on the employee's W-4. In the employee's profile, the "Federal taxes" tab asks you to enter the employee's W-4 answers. Inputs like marital status and dependents $ amount impacts how much tax is calculated.
Calculate Federal Income Tax by hand
Step-by-step instructions with examples to calculate Federal withholding manually: Calculate Federal Taxes
Why is my employee's federal tax $0?
The federal income tax might result in 0 if the calculation's gross pay resulted in an annual pay that is less than the standard deduction.
The standard deduction is a fixed amount that IRS deducts from everyone's federal income tax each year. It's updated every year.
Further reading: What is my employee's dependents amount?