How to calculate Federal Withholding using Annual Payroll Period table
- Begin by subtracting Pre-Tax deductions from the Gross Wages for the pay period.
- Multiply results by number of pay periods you have in a year.
- Locate the section this amount falls within on the tax table.
- Subtract the amount in the Of Excess Over column listed on the table.
- Multiply results by tax percentage. (if additional amount is listed, add this after you have multiplied against the percentage)
- Divide this amount by number of pay periods you used in step 2. The results will be your Federal tax amount per pay period.
Employee’s Gross wages are $666.40.
Pre-tax deductions are $83.17.
Employee is semi-monthly, therefore paid 24 times a year.
Employee is Single with 0 withholding allowances (if employee has withholding allowances, these are found on page 3 of the Circular E).
Step 1: 666.40 – 83.17 = 583.23
Step 2: 583.23 X 24 = 13997.52
Step 3: Amount falls on second line of payroll table.
Step 4: 13997.52 – 10400.00 = 3597.52
Step 5: 3597.52 X 15% = 539.628 + 322.00 = 861.628
Step 6: 861.628 ÷ 24 = 35.90
$35.90 will be your Federal Withholding for this pay period.
Please note that the tax table shown above is for example purposes only. Use the current tax table located on the IRS Circular E
to perform any calculations.