Why is the federal or state withholding amount not matching my wage bracket?
After calculating your payroll, you may notice the federal or state withholding amount does not match your wage bracket. That is because Sage DacEasy, like other computerized payroll systems, uses a formula to calculate withholding. This is commonly known as the percentage method. This method was designed for computer payroll systems. It is more accurate than the wage bracket tax table method since the program calculates withholdings on an annual basis as opposed to a periodic basis. The percentage method calculates to the penny, as opposed to the tables, which round off the result. The difference you notice can be anywhere from one cent to a couple of dollars.
Related Questions
- How do I designate my accountant to act as an intermediary in the process of obtaining federal and state wage tax credits?
- Why are federal and state withholding calculations in QuickBooks different than the printed wage bracket tables?
- How do I change federal or state income tax withholding from my Survivor Benefit Plan (SBP) annuity?
