Table of Contents

Withholding Tax Rate Tables

Greg Hatfield Updated by Greg Hatfield

This input screen is accessed from the Paycheck Withholding Calculator and the Live Payroll grid Withholding tab.

Paycheck Withholding Calculator access:

Live Payroll grid Withholding tab access:

Customized state and local withholding rate tables may be entered and saved for use with the Paycheck Withholding Calculator.

The state rates for California, New York, and selected other states, and the local rates for California State Disability Insurance and New York City have been provided with the program. These rate tables may be modified and saved. To restore the default tables provided with the program simply delete the file, exit the Paycheck Withholding Calculator module to the Module Library screen, and restart the module.

File Options

The desired rate table file may be selected from the dropdown list at the bottom of the screen. The following options are available as buttons at the bottom of the screen:

New - Allows the user to add a new rate table file by entering the place-name (at the top) and specifying whether it is a State or Local rate table (at the bottom). Each table may be customized for the Filing Status designations allowed in the state or locality. See the state's Payroll Withholding publication.

Clicking New clears all fields and allows the user to enter new information. Instead the user can edit the name of an existing file near the top of the screen, change the rates and click Save to create a new file with the new name. This technique is useful for editing one or two numbers without having to enter the entire schedule.

Save - Saves all entries made for the current state or locality file.

Delete - Deletes the current state or locality file.

Close - Prompts the user to save the current table changes before closing the Rate Table Screen.

Filing Status

Each state or locality may have its own unique filing status designations. Each filing status has a corresponding tab that contains the standard deduction, allowances, and rates for that status. Click the "Add Filing Status" or "Delete Filing Status" button at the top to add and delete filing status tabs. The name of the current tab can be entered or edited in the box below the buttons.

Withholding Rates

The Deductions/Allowances and Rates, etc. tabs must be completed for each filing status according to the state or locality payroll withholding guidelines. Annual withholding numbers should be used when completing the fields. Most states have annualized tables for computer programs. Note that the screen contains deduction and allowance options that apply to only a few states. When completing the options, fill in only those that apply. A brief description follows.


Standard Deduction: The standard deduction is subtracted from the annualized income before withholding is calculated on the remainder. Most states have a standard deduction. Enter the standard deduction. If the standard deduction changes depending on the number of allowances claimed, then enter the number of allowances and the changed standard deduction (example: Iowa).

Some states/localities base their standard deduction on a percentage of wages, usually with a minimum and maximum amount (example: Maryland local jurisdictions). Some states combine both standard deductions (example: Alabama).

There are some states that cut the standard deduction in half if the employee has two jobs or if the spouse works (example: Mississippi). Other states simply create a separate two-earner filing status (example: Maine). Check the box if this applies.

Federal Withholding Deduction: Federal Withholding is allowed as a deduction in some states (example: Oregon). Enter the percentage of federal withholding allowed as a deduction and the maximum, if applicable.

Once again, some states cut this deduction in half if the employee has two jobs or the spouse works (example: Missouri). Check this box if applicable.

Massachusetts allows the deduction of FICA and Medicare withholding up to a maximum amount. Once YTD totals reach that amount the deduction is no longer applied.

Allowances/Exemptions: Most states/localities allow personal, dependent, or other allowances (sometimes called exemptions). The allowances can take the form of a deduction (subtraction from income before withholding is calculated) or a credit (subtraction from tax after calculating the amount to withhold). Most states/localities allow either a deduction or a credit. Some states let you calculate it either way (but do not give an employee a deduction and a credit for the same allowance).

In most cases all allowances are worth the same deduction amount. Enter the amount in the amount field leaving the rest blank. Sometimes the first allowance is worth a different amount than the rest (example: Massachusetts). Fill in the appropriate fields. Occasionally the deduction amount is dependent on the wages earned (example: North Carolina). Enter the amount of the deduction, the wage level, and the amount of deduction above that wage level.

Personal allowances are deductions or credits for the taxpayer and spouse. Enter the amount as a deduction or credit.

If the allowance amount for dependents is different from the personal allowance amount, then enter that amount (example: Indiana). Otherwise leave it blank.

Some states/localities have different allowance amounts for other factors, such as itemized deductions (example: California) or being blind or over 65 (example: Illinois). Enter these amounts on the appropriate lines.

Note that on the employee input screen only those items with entries for the selected filing status will be available. For instance, if California has a credit type personal allowance and a deduction type Other allowance, then only those two fields may be filled on the employee paycheck screen. The other deduction and credit fields will be marked with N/A.

Rates, etc.

This tab contains the wage brackets and withholding percentages (use annual tables) for the filing status. It must be completed for each filing status. The last wage bracket must be ended with all nines (99999999). The percentage column must be entered as a percent, not a decimal. Some states have a flat rate (example: Illinois). Arizona withholding is based on a percentage of federal withholding. The rate table is blank. Users must enter the percentage for each employee on the paycheck input screen.

Certain localities have flat rate withholding up to a limit (California SDI). The calculation of withholding for these localities is not designed to be annualized. In order to achieve a non-annualized calculation of a flat rate, limited withholding, the user must enter 99999999 on the second line and 0 for the rate. YTD totals will be used to limit the withholding.

Some state/localities do not require withholding if annualized wages (example: California) or annualized withholding (example: Maine) are below certain levels. The level may be dependent on the number of allowances claimed (example: Iowa). Fill in these fields if applicable.

Other options include:

Minimum Annual Withholding amount: If the state/locality requires a minimum withholding, enter the annualized amount.

Calculate Withholding Based on Social Security Wages: Check this box if applicable (example: California SDI). Amounts of pay exempt from social security and Medicare withholding can be entered on the paycheck input screen. If the withholding is based on social security wages, then withholding will be calculated based on wages minus the exempt pay field. Note that withholding will not be subject to the social security wage limit.

Deductions reduce income taxed at the lowest rates: Checking this box causes any deductions to be taken from the lowest withholding rate brackets instead of the highest (example: only Louisiana).

Round Withholding to the Nearest Dollar: Check this box if applicable.

Note that Effective Date field at the bottom of the screen has no practical use other than to track when the rates entered became effective.

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