Why do employers withhold taxes every paycheck rather than all at once at the end of the year?

Because you wouldn't get a paycheck at all the last three or four months of the year! Taxes take up as much as 30% of your total pay.

First, no portion of withholding is the employer choice. It is absolutely regulated, required, reviewed, and if not followed, has substantial automatic financial penalties as well as possible criminal ones.

Obviously the employer would prefer to do it less frequently too, as it would essentially cost less (in many ways including in cash flow) and certainly in accounting and other expenses. (And remember, much of what comes out of your paycheck is NOT withholding, but rather things like Social Security (FICA), which the employer is paying as much (and currently much more) than YOUR contribution portion is. Pretty much the same with what must be paid as unemployment and disability insurance, (or your contribution to a group insurance plan) where again, you are paying less than the employer.

And of course that is the point of withholding...."Pay as you go".

While even the government needs the cash flow to spend now, if it wasn't kept from them most people wouldn't be able to pay their bill when due. They would have spent the money!

Now because your asking in such a way as if it would just be so much easier for everyone, and no problem for you to just write the check at the end of the year. How about doing it the other way? You know, pay all your going to owe...but at the start of the year? Sound good? See any problems with it? Can't do it because you haven't made it yet? But you could never do it if you didn't save for it...so you would have to "withhold" on yourself, every paycheck. Same result as having the employer do it for you - EXCEPT, all the things required to do so - calculating, accounting and even sending it in is handled for you. Easier.

Now understand, the self employed, who aren't on someones payroll that handles it for them - they actually do just that. Whenever they get paid, they have to put the right amount to the side to pay over as tax (as well as many of the things previously mentioned - like their insurance premiums. The "estimated" tax is paid over quarterly, and again, all very all very regulated and reviewed, so if you don't pay over enough in each quarterly estimate, as determined by the computer looking back at how much and when you paid it, compared to how much you made and when you file your return (on April 15th for the prior year), you pay additional penalties and interest.