How is federal income tax withholding calculated using the wage-bracket method?
When using the wage-bracket method to determine federal income tax withholding the employer must perform the following steps: • Determine the employee’s wages subject to federal income tax withholding (gross wages less any pre-tax deductions) • Find the wage-bracket table (pages 39-58) that corresponds to the employee’s payroll period and marital status • Locate the wage-bracket that contains the employee’s wages subject to federal income tax withholding • Determine the amount to be withheld from the employee’s wages • Add any additional withholding requested by the employer on Form W-4
