Small Business Taxes & Management--Copyright 2011, 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 2012 is 25%.
Backup Withholding--The backup withholding rate for 2012 is 28%.
2012 Weekly Payroll Period
2012 Semimonthly Payroll Period
2012 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 $41 $0 Over-- But not over-- of excess over-- $ 41 $209 10% $ 41 $209 $721 $16.80 plus 15% $209 $721 $1,688 $93.60 plus 25% $721 $1,688 $3,477 $335.35 plus 28% $1,688 $3,477 $7,510 $836.27 plus 33% $3,477 $7,510 . . . $2,167.16 plus 35% $7,510 MARRIED person If the amount of wages The amount of income tax (after withholding allowances): to withhold is: Not over $156 $0 Over-- But not over-- of excess over-- $156 $490 10% $156 $490 $1,515 $33.40 plus 15% $490 $1,515 $2,900 $187.15 plus 25% $1,515 $2,900 $4,338 $533.40 plus 28% $2,900 $4,338 $7,624 $936.04 plus 33% $4,338 $7,624 . . . $2,020.42 plus 35% $7,624Biweekly Payroll Period--2012
SINGLE person (including head of household) If the amount of wages The amount of income tax (after withholding allowances): to withhold is: Not over $83 $0 Over-- But not over-- of excess over-- $ 83 $417 10% $ 83 $417 $1,442 $33.40 plus 15% $417 $1,442 $3,377 $187.15 plus 25% $1,442 $3,377 $6,954 $670.90 plus 28% $3,377 $6,954 $15,019 $1,672.46 plus 33% $6,954 $15,019 . . . $4,333.91 plus 35% $15,019 MARRIED person If the amount of wages The amount of income tax (after withholding allowances): to withhold is: Not over $312 $0 Over-- But not over-- of excess over-- $312 $981 10% $312 $981 $3,031 $66.90 plus 15% $981 $3,031 $5,800 $374.40 plus 25% $3,031 $5,800 $8,675 $1,066.65 plus 28% $5,800 $8,675 $15,248 $1,871.65 plus 33% $8,675 $15,248 . . . $4,040.74 plus 35% $15,248Semimonthly Payroll Period--2012
SINGLE person (including head of household)
If the amount of wages The amount of income tax
(after withholding allowances): to withhold is:
Not over $90 $0
Over-- But not over-- of excess over--
$90 $452 10% $90
$452 $1,563 $36.20 plus 15% $452
$1,563 $3,658 $202.85 plus 25% $1,563
$3,658 $7,533 $726.60 plus 28% $3,658
$7,533 $16,271 $1,811.60 plus 33% $7,533
$16,271 . . . $4,695.14 plus 35% $16,271
MARRIED person
If the amount of wages The amount of income tax
(after withholding allowances): to withhold is:
Not over $338 $0
Over-- But not over-- of excess over--
$338 $1,063 10% $338
$1,063 $3,283 $72.50 plus 15% $1,063
$3,283 $6,283 $405.50 plus 25% $3,283
$6,283 $9,398 $1,155.50 plus 28% $6,283
$9,398 $16,519 $2,027.70 plus 33% $9,398
$16,519 . . . $4,377.63 plus 35% $16,519
Monthly Payroll Period--2012
SINGLE person (including head of household) If the amount of wages The amount of income tax (after withholding allowances): to withhold is: Not over $179 $0 Over-- But not over-- of excess over-- $179 $904 10% $179 $904 $3,125 $72.50 plus 15% $904 $3,125 $7,317 $405.65 plus 25% $3,125 $7,317 $15,067 $1,453.65 plus 28% $7,317 $15,067 $32,542 $3,623.65 plus 33% $15,067 $32,542 . . . $9,390.40 plus 35% $32,542 MARRIED person If the amount of wages The amount of income tax (after withholding allowances): to withhold is: Not over $675 $0 Over-- But not over-- of excess over-- $675 $2,125 10% $675 $2,125 $6,567 $145.00 plus 15% $2,125 $6,567 $12,567 $811.30 plus 25% $6,567 $12,567 $18,796 $2,311.30 plus 28% $12,567 $18,796 $33,038 $4,055.42 plus 33% $18,796 $33,038 . . . $8,755.28 plus 35% $33,038Daily Payroll Period--2012
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 $8.30 $0
Over-- But not over-- of excess over--
$8.30 $41.70 10% $8.30
$41.70 $144.20 $3.34 plus 15% $41.70
$144.20 $337.70 $18.72 plus 25% $144.20
$337.70 $695.40 $67.10 plus 28% $337.70
$695.40 $1,501.90 $167.26 plus 33% $695.40
$1,501.90 . . . $433.41 plus 35% $1,501.90
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 $31.20 $0
Over-- But not over-- of excess over--
$31.20 $98.10 10% $31.20
$98.10 $303.10 $6.69 plus 15% $98.10
$303.10 $580.00 $37.44 plus 25% $303.10
$580.00 $867.50 $106.67 plus 28% $580.00
$867.50 $1,524.80 $187.17 plus 33% $867.50
$1,524.80 . . . $404.08 plus 35% $1,524.80
Amount for One Withholding Allowance--2012
Payroll Period One Withholding Allowance Weekly $ 73.08 Biweekly 146.15 Semimonthly 158.33 Monthly 316.67 Daily or miscellaneous 14.62
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 . . . . . $73.08 Allowances claimed on W-4 . . . . . . 2 Multiply line 2 by line 3 . . . . . . . . . . . $146.16 Amount subject to withholding (line 1 less line 4 . . . . . . . . . . . . . . . . . . . $453.84 Tax to be withheld on $453.84 . . . . . . . . $ 53.53Note. 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 2011 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. Articles in this publication are not intended to be used, and cannot be used, for the purpose of avoiding accuracy-related penalties that may be imposed on a taxpayer. The information is not necessarily a complete summary of all materials on the subject. Copyright is not claimed on material from U.S. Government sources.--ISSN 1089-1536
--Last update 12/14/11