Question

Lisa earns $65,000 per year. She is married and claims three allowances. Assume that her employer uses wage bracket tables method. Use withholding allowance, wage bracket table and IRS Publication 15.

a.If she is paid weekly, what is her withholding per paycheck?

b.If she is paid monthly, what is her withholding per paycheck?

c.If she is paid biweekly, what is her withholding per paycheck?

d.If she is paid semimonthly, what is her withholding per paycheck?

Answer 1

The question has been answered for rules as applicable to income earned in 2019.

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Part a)

The value of Lisa's withholding per paycheck if she is paid weekly is arrived as below:

Weekly Wage = Yearly Wage/Number of Weeks = 65,000/52 = $1,250

Locating this value of $1,250 in the relevant table for income tax withholding for weekly payroll period we get the total withholding per paycheck as $87. [Page 51 of the Publication]

Answer for Part a) is $87.

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Part b)

The value of Lisa's withholding per paycheck if she is paid monthly is determined as below:

Monthly Wage = Yearly Wage/Number of Months = 65,000/12 = $5,416.67

Withholding per Paycheck = 161.70 + (5,416.67 - 3*350 - 2,600)*12% = $373.70 [we will have to use the percentage method tables as the monthly wage exceeds the maximum amount for which withholding amount as per wage bracket tables method is available in IRS 15] [Page 44, 45 and 46 of the publication]

Answer for Part b) is $373.70.

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Part c)

The value of Lisa's withholding per paycheck if she is paid biweekly is arrived as follows:

Biweekly Wage = Yearly Wage/(Number of Weeks/2) = 65,000/(52/2) = $2,500

Locating this value of $2,500 in the relevant table for income tax withholding for biweekly payroll period we get the total withholding per paycheck as $172. [Page 55 of the Publication]

Answer for Part c) is $172.

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Part d)

The value of Lisa's withholding per paycheck if she is paid semimonthly is determined as follows:

Semimonthly Wage = Yearly Wage/(Number of Months*2) = 65,000/(12*2) = $2,708.33

Withholding per Paycheck = 80.80 + (2,708.33 - 3*175 - 1,300)*12% = $186.80 [we will have to use the percentage method tables as the semimonthly wage exceeds the maximum amount for which withholding amount as per wage bracket tables method is available in IRS 15] [Page 44, 45 and 46 of the publication]

Answer for Part d) is $186.80.