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taxmap/pubs/p15a-009.htm#TXMP6c2f7d93 |
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Two formula tables for percentage method withholding are on pages 25 and 26. The differences in the Alternative Percentage Method formulas and the steps for figuring withheld tax for different payroll systems are shown in this example.
| If wages exceeding the allowance amount are over $154 but not over $449: | |||
| Method: | Income Tax Withheld: | ||
| Percentage (Pub. 15) | 10% of excess over $154 | ||
| Alternative 1 (Page 25) | 10% of such wages minus $15.4 | ||
| Alternative 2 (Page 26) | Such wages minus $154, times 10% of remainder | ||
taxmap/pubs/p15a-009.htm#TXMP1348e199 |
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For wages paid after December 31, 2005, employers must use a modified procedure to figure the amount of federal income tax withholding on the wages of nonresident alien employees. This procedure is discussed in Publication 15 (Circular E). Before you use these tables to figure the federal income tax withholding on the wages of nonresident alien employees, see Publication 15 (Circular E).
taxmap/pubs/p15a-009.htm#TXMP6c733f2f |
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When employers use the percentage method in Publication 15 (Circular E) or the formula tables for percentage method withholding in this publication, the tax for the pay period may be rounded to the nearest dollar. If rounding is used, it must be used consistently. Withheld tax amounts should be rounded to the nearest whole dollar by (a) dropping amounts under 50 cents and (b) increasing amounts from 50 to 99 cents to the next higher dollar. This rounding will be considered to meet the tolerances under section 3402(h)(4).
Formula Tables 1 Formula Tables 2 
