@missjulia101 

"For example, one of our employees has made 17,625 (adjusted gross) so far for 2025, but intuit has only taken out 1,289 in federal taxes. Given that this employee makes ~70k/year married filing jointly, their tax rate is around 12%, so this employee already owes over 1k for 2025!"

That's incorrect.  At this point, your employee owes $0 in federal income tax.  Remember that the standard deduction for MFJ filers is $30K, so your employee doesn't owe a dime in income tax until they make $30,001.  An MFJ filer (assuming no working spouse, dependents, or other adjustments) making $70K/year, pays $4,568 in federal income tax:

10% on the first $11,600 over $30,000 = $1,160

12% on the final $28,400 over $41,600 = $3,408

If your employee has paid $1,289 in federal income tax in 3 months, they will pay ~$5,156 in total income tax for the year which is more than enough.  Of course this depends on their exact situation based on their W-4.