Small Business Taxes & Management--Copyright 2010, A/N Group, Inc.
Contents
Note. There are several other ways to compute withholdings. IRS Publication 15, Circular E, Employer's Tax Guide contains wage bracket tables and detailed explanations. See also IRS Publication 15A, Employer's Supplemental Tax Guide, for alternative withholding methods and information on other situations. You can download these publications at the IRS website at www.irs.ustreas.gov/formspubs/index.html.
If you have more than a few employees you should strongly consider using a software program or a payroll service.
Supplemental Wages--The supplemental wage flat withholding rate for 2010 is 25%.
Backup Withholding--The backup withholding rate for 2010 is 28%.
2010 Weekly Payroll Period
2010 Semimonthly Payroll Period
2010 Amount for One Withholding Allowance
SINGLE person (including head of household) If the amount of wages The amount of income tax (after withholding allowances): to withhold is: Not over $116 $0 Over-- But not over-- of excess over-- $116 $200 10% $116 $200 $693 $8.40 plus 15% $200 $693 $1,302 $82.35 plus 25% $693 $1,302 $1,624 $234.60 plus 27% $1,302 $1,624 $1,687 $321.54 plus 30% $1,624 $1,687 $3,344 $340.44 plus 28% $1,687 $3,344 $7,225 $804.40 plus 33% $3,344 $7,225 . . . $2,085.13 plus 35% $7,225 MARRIED person If the amount of wages The amount of income tax (after withholding allowances): to withhold is: Not over $264 $0 Over-- But not over-- of excess over-- $264 $471 10% $264 $471 $1,457 $20.70 plus 15% $471 $1,457 $1,809 $168.60 plus 25% $1,457 $1,809 $2,386 $256.60 plus 27% $1,809 $2,386 $2,789 $412.39 plus 25% $2,386 $2,789 $4,173 $513.14 plus 28% $2,789 $4,173 $7,335 $900.66 plus 33% $4,173 $7,335 . . . $1,944.12 plus 35% $7,335Biweekly Payroll Period--2010
SINGLE person (including head of household) If the amount of wages The amount of income tax (after withholding allowances): to withhold is: Not over $233 $0 Over-- But not over-- of excess over-- $233 $401 10% $233 $401 $1,387 $16.80 plus 15% $401 $1,387 $2,604 $164.70 plus 25% $1,387 $2,604 $3,248 $468.95 plus 27% $2,604 $3,248 $3,373 $642.83 plus 30% $3,248 $3,373 $6,688 $680.33 plus 28% $3,373 $6,688 $14,450 $1,608.53 plus 33% $6,688 $14,450 . . . $4,169.99 plus 35% $14,450 MARRIED person If the amount of wages The amount of income tax (after withholding allowances): to withhold is: Not over $529 $0 Over-- But not over-- of excess over-- $529 $942 10% $529 $942 $2,913 $41.30 plus 15% $942 $2,913 $3,617 $336.95 plus 25% $2,913 $3,617 $4,771 $512.95 plus 27% $3,617 $4,771 $5,579 $824.53 plus 25% $4,771 $5,579 $8,346 $1,026.53 plus 28% $5,579 $8,346 $14,669 $1,801.29 plus 33% $8,346 $14,669 . . . $3,887.88 plus 35% $14,669Semimonthly Payroll Period--2010
SINGLE person (including head of household) If the amount of wages The amount of income tax (after withholding allowances): to withhold is: Not over $252 $0 Over-- But not over-- of excess over-- $252 $434 10% $252 $434 $1,502 $18.20 plus 15% $434 $1,502 $2,821 $178.40 plus 25% $1,502 $2,821 $3,519 $508.15 plus 27% $2,821 $3,519 $3,654 $696.61 plus 30% $3,519 $3,654 $7,246 $737.11 plus 28% $3,654 $7,246 $15,654 $1,742.87 plus 33% $7,246 $15,654 . . . $4,517.51 plus 35% $15,654 MARRIED person If the amount of wages The amount of income tax (after withholding allowances): to withhold is: Not over $573 $0 Over-- But not over-- of excess over-- $573 $1,021 10% $573 $1,021 $3,156 $44.80 plus 15% $1,021 $3,156 $3,919 $365.05 plus 25% $3,156 $3,919 $5,169 $555.80 plus 27% $3,919 $5,169 $6,044 $893.30 plus 25% $5,169 $6,044 $9,042 $1,112.05 plus 28% $6,044 $9,042 $15,892 $1,951.49 plus 33% $9,042 $15,892 . . . $4,211.99 plus 35% $15,892Monthly Payroll Period--2010
SINGLE person (including head of household) If the amount of wages The amount of income tax (after withholding allowances): to withhold is: Not over $504 $0 Over-- But not over-- of excess over-- $504 $869 10% $504 $869 $3,004 $36.50 plus 15% $869 $3,004 $5,642 $356.75 plus 25% $3,004 $5,642 $7,038 $1,016.25 plus 27% $5,642 $7,038 $7,308 $1,393.17 plus 30% $7,038 $7,308 $14,492 $1,474.17 plus 28% $7,308 $14,492 $31,308 $3,485.69 plus 33% $14,492 $31,308 . . . $9,034.97 plus 35% $31,308 MARRIED person If the amount of wages The amount of income tax (after withholding allowances): to withhold is: Not over $1,146 $0 Over-- But not over-- of excess over-- $1,146 $2,042 10% $1,146 $2,042 $6,313 $89.60 plus 15% $2,042 $6,313 $7,838 $730.25 plus 25% $6,313 $7,838 $10,338 $1,111.50 plus 27% $7,838 $10,338 $12,088 $1,786.50 plus 25% $10,338 $12,088 $18,083 $2,224.00 plus 28% $12,088 $18,083 $31,783 $3,902.50 plus 33% $18,083 $31,783 . . . $8,423.60 plus 35% $31,783Daily Payroll Period--2010
SINGLE person (including head of household) If the amount of wages The amount of income tax (after withholding allowances) to withhold is: divided by the number of days in the payroll period is: Not over $23.30 $0 Over-- But not over-- of excess over-- $23.30 $40.10 10% $23.30 $40.10 $138.70 $1.68 plus 15% $40.10 $138.70 $260.40 $16.47 plus 25% $138.70 $260.40 $324.80 $46.90 plus 27% $260.40 $324.80 $337.30 $64.29 plus 30% $324.80 $337.30 $668.80 $68.04 plus 28% $337.30 $668.80 $1,445.00 $160.86 plus 33% $668.80 $1,445.00 . . . $417.01 plus 35% $1,445.00 MARRIED person If the amount of wages The amount of income tax (after withholding allowances) to withhold is: divided by the number of days in the payroll period is: Not over $52.90 $0 Over-- But not over-- of excess over-- $52.90 $94.20 10% $52.90 $94.20 $291.30 $4.13 plus 15% $94.20 $291.30 $361.70 $33.70 plus 25% $291.30 $361.70 $477.10 $51.30 plus 27% $361.70 $477.10 $557.90 $82.64 plus 25% $477.10 $557.90 $834.60 $102.66 plus 28% $557.90 $834.60 $1,466.90 $180.14 plus 33% $834.60 $1,466.90 . . . $388.80 plus 35% $1,466.90
Amount for One Withholding Allowance--2010
Payroll Period One Withholding Allowance Weekly $ 70.19 Biweekly 140.38 Semimonthly 152.08 Monthly 304.17 Daily or miscellaneous 14.04
Example--An unmarried employee is paid $600 weekly. The employee has in effect a Form W-4 claiming two withholding allowances. Using the percentage method, you would figure the income tax to withhold as follows:
Total wage payment . . . . . . . . . . . . . . . $600.00 Reduction for one allowance . . . . . $70.19 Allowances claimed on W-4 . . . . . . 2 Multiply line 2 by line 3 . . . . . . . . . . . $140.38 Amount subject to withholding (line 1 less line 4 . . . . . . . . . . . . . . . . . . . $459.62 Tax to be withheld on $459.62 . . . . . . . . $ 47.34Note. When using the percentage tables, 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 by dropping amounts under 50 cents and increasing amounts from 50 to 99 cents to the next higher dollar. For example, $2.30 becomes $2 and $2.80 becomes $3.
Copyright 2010 by A/N Group, Inc. This publication is designed to provide accurate and authoritative information in regard to the subject matter covered. It is distributed with the understanding that the publisher is not engaged in rendering legal, accounting, or other professional service. If legal advice or other expert assistance is required, the services of a competent professional should be sought. The information is not necessarily a complete summary of all materials on the subject.--ISSN 1089-1536
--Last update 01/01/10