To compute the tax using the percentage method for Manual Payroll Systems with Forms W$-4$ from $2020$ or Later using Standard Withholding Rate Schedules, follow the steps illustrated below.

Step $1$

Determine the amount of gross wages earned, filing status, adjustments on Form W$-4,$ and frequency of pay. Note: If the wage ends in a fractional dollar amount, the wage may be rounded to the nearest dollar. However, in this text, exact wages are used. $$ Wilson Goodman, single $($S$),$ has no adjustments on his Form W$-4$ and earns $$915\mathrm{.}60$ semimonthly.

Step $2$

Determine the withholding tax by referring to the appropriate Percentage Method Withholding Table $($see Figure $4\mathrm{.}6$ below$).$ Compute tax from Tax Table A$,$ Semimonthly, Standard Withholding Rate Schedule, page T$-3.$

$($$$915\mathrm{.}60$ $$523\mathrm{.}00=$ $$392\mathrm{.}60\backslash$times $10\%=$ $$39\mathrm{.}26+$ $$0)=$ $$39\mathrm{.}26$

Use the percentage method to compute the federal income taxes to withhold from the wages or salaries of each employee. If an amount is zero, enter $"0".$ If required, round your calculations and final answers to the nearest cent.

As we go to press, the federal income tax rates for $2022$ are being determined by budget talks in Washington and not available for publication. For this edition, the $2021$ federal income tax tables for Manual Systems with Forms W$-4$ from $2020$ or later with Standard Withholding and $2021$ FICA rates have been used.

Click here to access the Percentage Method Tables.

Employee

No$.$

Employee

Name

Filing

Status No$.$ of Withholding

Allowances

Gross Wage

or Salary Amount

to Be

Withheld

$1$ James, A$.$ MFJ N$/$A $$1,610$ weekly $fill in the blank $1$

$2$ Lake, R$.$ S N$/$A $825$ biweekly fill in the blank $2$

$3$ Walls, S$.$ MFJ N$/$A $925$ semimonthly fill in the blank $3$

$4$ Free, Y$.$ MFJ N$/$A $2,875$ monthly fill in the blank $4$