Question
Percentage Method The percentage method is used when an employee's wages exceed the Publication 15 tables provided. The process for this method is to take
Percentage Method
The percentage method is used when an employee's wages exceed the Publication 15 tables provided. The process for this method is to take the earnings, subtract the allowances the employee declared on their W-4 which results in the wages upon which taxes will be computed.
| Table of Allowance Values for 2019 | |||||||||||
| Weekly | 80.80 | Biweekly | 161.50 | Semimonthly | 175.00 | Monthly | 350.00 | ||||
| Quarterly | 1,050.00 | Semiannual | 2,100.00 | Annual | 4,200.00 | Daily/Misc. | 16.20 | ||||
Wage Example's sister-in-law Perfect is married and claims 3 allowances. She earns $4,140.75 biweekly.
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Description Calculation 1. Determine the amount of gross wages. $4,140.75, rounded to the nearest dollar. $4,141.00 2. Determine the allowancea amount based on the payroll period. $161.50 3. Multiply the allowance value by the employee allowances claimed. 3 (484.50) 4. Subtract allowances from gross pay, referred to as excess wages. $3,656.50 5. Using the percentage_table, identify the correct bracket. Wages starting at $3,490 but not over $6,931. $3,656.50 (3,490.00) 6. Compute the excess wage over the starting wage for this bracket. $166.50 7. Multiply the excess by the tax rate in the table (22%) x .22 $36.63 8. Add the bracket minimum tax, $349.40 349.40 9. Add the two amounts together which equals Perfect's total withholding. $386.03 a Refer to the Table of Allowance Values for 2019. Perfect is paid biweekly which corresponds to a biweekly allowance of $161.50 per allowance claimed.
Medal Points: Complete the following. The Percentage Method must be used for a single employee, paid weekly, whose wages exceeds $ on the Form W-4 .
Tackle It
Serena Williams is married, claims 4 allowances, and is paid $11,640.25 on a monthly basis.
Note: Enter ALL values as positive numbers and round amounts to two decimal places unless instructed otherwise.
| Description | Calculation | |||
| 1. | Determine the amount of gross wages. $11,640.25, rounded to the nearest dollar. | $ | ||
| 2. | Enter the value of the allowances based on the payroll period. | $ | ||
| 3. | Multiply the allowance value by the employee allowances claimed. | 4 | () | |
| 4. | Subtract allowances from gross pay, referred to as excess wages. | $ | ||
| 5. | Identify the correct bracket. Wages starting at $ but not over $. | $ () | ||
| 6. | Determine the value over the starting wage for this bracket. | $ | ||
| 7. | Multiply the overage by the tax rate in the table (enter as a decimal). | x | $ | |
| 8. | Add the bracket minimum tax. | |||
| 9. | Add the two amounts together = Total withholding for Serena Williams. | $ |
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Economic Influences On The Development Of Accounting In Firms
Authors: George J. Staubus
1st Edition
0367721325, 9780367721329
