Question

Percentage Method

The percentage method is used when an employee's wages exceed the Publication 15 tables provided. The process for this method is to take the earnings, subtract the allowances the employee declared on their W-4 which results in the wages upon which taxes will be computed.

Table of Allowance Values for 2019
Weekly	80.80		Biweekly	161.50		Semimonthly	175.00		Monthly	350.00
Quarterly	1,050.00		Semiannual	2,100.00		Annual	4,200.00		Daily/Misc.	16.20

Wage Example's sister-in-law Perfect is married and claims 3 allowances. She earns $4,140.75 biweekly.

1. 	Description			Calculation
   1.	Determine the amount of gross wages. $4,140.75, rounded to the nearest dollar.			$4,141.00
   2.	Determine the allowancea amount based on the payroll period.	$161.50
   3.	Multiply the allowance value by the employee allowances claimed.	× 3		(484.50)
   4.	Subtract allowances from gross pay, referred to as excess wages.			$3,656.50
   5.	Using the percentage_table, identify the correct bracket. Wages starting at $3,490 but not over $6,931.	$3,656.50 (3,490.00)
   6.	Compute the excess wage over the starting wage for this bracket.	$166.50
   7.	Multiply the excess by the tax rate in the table (22%)	x .22		$36.63
   8.	Add the bracket minimum tax, $349.40			349.40
   9.	Add the two amounts together which equals Perfect's total withholding.			$386.03
   	a Refer to the Table of Allowance Values for 2019. Perfect is paid biweekly which corresponds to a biweekly allowance of $161.50 per allowance claimed.

? Medal Points: Complete the following. The Percentage Method must be used for a single employee, paid weekly, whose wages exceeds $fill in the blank 6c347c0edfc1fbb_1 on the Wage-Bracket Tables .

? Tackle It

Serena Williams is married, claims 4 allowances, and is paid $11,990.25 on a monthly basis.

Note: Enter ALL values as positive numbers and round amounts to two decimal places unless instructed otherwise.

	Description			Calculation
1.	Determine the amount of gross wages. $11,990.25, rounded to the nearest dollar.			$fill in the blank 6c347c0edfc1fbb_3
2.	Enter the value of the allowances based on the payroll period.	$fill in the blank 6c347c0edfc1fbb_4
3.	Multiply the allowance value by the employee allowances claimed.	× 4		(fill in the blank 6c347c0edfc1fbb_5)
4.	Subtract allowances from gross pay, referred to as excess wages.			$fill in the blank 6c347c0edfc1fbb_6
5.	Identify the correct bracket. Wages starting at $fill in the blank 6c347c0edfc1fbb_7 but not over $fill in the blank 6c347c0edfc1fbb_8.	$fill in the blank 6c347c0edfc1fbb_9 (fill in the blank 6c347c0edfc1fbb_10)
6.	Determine the value over the starting wage for this bracket.	$fill in the blank 6c347c0edfc1fbb_11
7.	Multiply the overage by the tax rate in the table (enter as a decimal).	x fill in the blank 6c347c0edfc1fbb_12		$fill in the blank 6c347c0edfc1fbb_13
8.	Add the bracket minimum tax.			fill in the blank 6c347c0edfc1fbb_14
9.	Add the two amounts together = Total withholding for Serena Williams.			$fill in the blank 6c347c0edfc1fbb_15

Answer 1

Description			Calculation
1	Determine the amount of gross wages. $11,640.25, rounded to the nearest dollar.			$ 11,640.00
2	Enter the value of the allowances based on the payroll period.	$350
3	Multiply the allowance value by the employee allowances claimed.	x 4		$-1,400.00
4	Subtract allowances from gross pay, referred to as excess wages.			$ 10,240.00
5	Identify the correct bracket.	$ 10,240
Wages starting at $7,563 but not over $15,017	($7,563)
6	Determine the value over the starting wage for this bracket.	$2,677
7	Multiply the overage by the tax rate in the table (enter as a decimal).	x 0.22		$ 588.94
8	Add the bracket minimum tax.			$ 757.26
9	Add the two amounts together = Total withholding for Serena Williams.			$ 1,346.20

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