Tax Table - Federal Instructions

Steps to calculate federal withholding taxes are shown in the example below. You may also calculate your tax withholding by going to At Your Service Online (see Related Information).

Example:  A married employee is paid $4,750 gross each month. The employee has $800 of tax deferred deductions. The employee claims single marital status and 3 withholding allowances on the W-4 form. The federal income tax is calculated as follows:

Calculation of Federal Withholding Tax Based on 2012 Tax Information 
Step 1:  Determine
taxable
income.
A.  Gross Earnings4,750.00
B.  Less tax deferred deductions (see note below for list of tax deferred deductions)-800.00
C.  Taxable Income3950.00
Step 2:
Determine
value of
allowances.
D.  The value of one allowance (See Federal Tax Table for amount)325.00 
E.  The number of allowances on W-4 Form3 
F.  Multiply D by E-975.00
Step 3: Determine tax table income.G.  Income subject to Withholding (subtract F from C)

2975.00

Step 4:  Calculate federal withholding.H.  Determine Payroll Period: Monthly
I.  Determine W-4 marital status: Single
J.  Determine appropriate tax table section: Monthly Payroll Period/Single Person
K.  Find the appropriate range by comparing the Tax Table Income (G) to the ranges of the tax table section determined (J). For this example, the income of $2975.00 is between the range of "$927 but not over $3204."
L.  List the income subject to withholding (G)

2795.00

 
M.  Subtract the lower value of the appropriate range (see K).  This is called the marginal income -927.00 
N.  Difference2048.00 
O.  List tax rate15% 
P.  Multiply N by O 307.20
Q.  Add the tax amount on the marginal income of taxable income.  In this example, the tax amount on $2,038 is ... 74.40
R. Total federal tax withholdings (add P and Q) 381.60

Note: Tax deferred deductions can include DCP-REG, DCP-CAS, 403b, 457(b), DEPCARE, pretaxed parking, pretaxed vanpool deduction, HFSA and employee-paid health.

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