Use the withholding tax calculator to compute the amount of tax to be withheld from each of your employees' wages. This withholding formula is effective 01/01/2008.
| G = Gross Pay for Pay Period | P = Pay periods per year |
| A = Annualized gross pay | E1 = Personal and Dependent Exemptions |
| T = Annualized taxable income | E2 = Age 65 and Over & Blind Exemptions |
| WH = Tax to be withheld for pay period | W = Annualized tax to be withheld |
G x P - ($3000+ (E1 x 930) + (E2 x 800)) = T
Calculate W as follows:
| If T is: | W is: | |
|---|---|---|
| Not over $3,000 | 2% of T | |
| Over | But Not Over | Then |
| $3,000 | $5,000 | $60 + (3% of excess over $3,000) |
| $5,000 | $17,000 | $120 + (5% of excess over $5,000) |
| $17,000 | $720 + (5.75% of excess over $17,000) | |
W / P = WH
John is married, with three dependent children. His spouse is blind. He claims a total of 6 exemptions:
- 5 personal and dependent exemptions; one for himself, his wife, and one for each of his three children ( E1 exemptions); and
- 1 additional exemption for "blind" for his spouse (E2 exemption).
John is paid on a semimonthly basis, and his gross wages for this pay period were $2500.
G x P - ($3000+ (E1 x 930) + (E2 x 800)) = T
2500*24 - [3,000 + (5*930) +(1*800)]= T
60,000 - [3000+4650+800] = T
60,000 - 8450 = 51550
W is $720 + 5.75% of amount over $17,000 ($51,550 - $17,000 = $34,550)
5.75% of $34,550 = $1,986.63
$720 + $1,986.63 = $2706.63
W / P = WH
$2,706.63 ÷ 24 = $112.78
Tax to be withheld per pay period is $112.78
Last Updated 5/27/2009 10:28
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