Final answer:
In absence of a Form W-4, the default withholding status used is Single with 0 allowances, which is answer D.
Step-by-step explanation:
If a new hire does not submit a Form W-4 by their first payday and they are assumed to be married with three children, according to IRS guidelines, the employer should treat them as a single filer with zero allowances when calculating withholding. Therefore, the correct answer is D. Single with 0 allowances.
Without a W-4, the employer does not have the information to claim any allowances or to use a married status, which would normally lead to less tax being withheld. The IRS's default status is the highest withholding rate to ensure enough tax is collected.
It's important for employees to accurately complete and submit a W-4 to ensure the correct amount of tax is withheld from their paychecks and to prevent owing a large sum when filing their tax return.