This is because of IE's incorrect rendering of the "
Box Model".
There are plenty of
Box Model Hacks which you can use to bypass this, however, the best way to do it to give the padding to a div that is inside the one with a width.
So like:
Code:
<div style="width:500px;">
<div style="padding: 20px;">
Hello World :)
</div>
</div>