Form
W-4 must be completed by each employee at UTSA in order for the payroll department to determine how much income tax
to withhold from each paycheck. It’s
important to note that, in accordance with the IRS, if the W-4 is not completed
in a timely manner, is completed incorrectly or is altered in any way, the tax
withheld must be based on a single filing status with NO allowances.
If you want to know how much withholding tax will be deducted if you change your marital status and/or number of allowances, the YI3 command in DEFINE will allow you to see different scenarios. It does NOT change your existing information. Any actual changes require the submission of a new Form W-4 to the payroll department.
If you are not sure how many allowances to claim on Form W-4, go to the Withholding Calculator for help.
How Does UTSA Determine the Amount of Federal Income Tax Withholding Deducted from My Paycheck?
UTSA uses the Monthly Payroll Period Percentage Method of Withholding to determine the amount of withholding tax to deduct from each employee’s paycheck. See example #1 below. Note: if you are paid semi-monthly, you will need to add the taxable gross from each paycheck received within the that same month. See example #2 below.
The table from page 34 of the Circular E, Employer’s Tax Guide for 2002 is reproduced here for use in the example below.
For the most current table, click here.
Table 4 –Example Monthly Payroll Period
|
Single person (including head of household)
|
Married person |
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|
If the amount of wages (after subtracting withholding allowances) is: |
The amount of income tax to withhold is: |
If the amount of wages (after subtracting withholding allowances) is: |
The amount of income tax to withhold is: |
|||||
|
Not over $221 |
$0 |
Not over $538 |
$0 |
|||||
|
Over- |
But not over- |
Tax plus tax rate on excess |
Of excess over- |
Over- |
But not over- |
Tax plus tax rate on excess |
Of excess over- |
|
|
$221 |
$713 |
10% |
$221 |
$538 |
$1,538 |
10% |
$538 |
|
|
$713 |
$2,471 |
$49.20 plus 15% |
$713 |
$1,538 |
$4,296 |
$100 plus 15% |
$1,538 |
|
|
$2,471 |
$5,402 |
$312.90 plus 27% |
$2,471 |
$4,296 |
$9,142 |
$513.70 plus 27% |
$4,296 |
|
|
$5,402 |
$11,913 |
$1,104.27 plus 30% |
$5,402 |
$9,142 |
$14,733 |
$1,822.12 plus 30% |
$9,142 |
|
|
$11,913 |
|
$3,057.57 plus 35% |
$11,913 |
$14,733 |
|
$3,499.42 plus 35% |
$14,733 |
|
| $25,729 | $7,893.17 plus 38.6% | $25,729 | $25,992 | 7,440.07 plus 38.6% | $25,992 | |||
When you complete your Form W-4, it is sent to Payroll for posting in DEFINE. The total number of allowances you claim determine the withholding allowance amount used. The percentage method amount for one withholding allowance for a monthly payroll period is $250.00, which is found on Page 32 of the Circular E.
Example #1: Monthly Pay
An unmarried employee has a salary of $3000 per month. Assume the employee is not eligible for benefits, and that there are no deductions for insurance or retirement, other than social security. That is, the employee’s taxable income is $3000. The employee turned in a Form W-4 claiming two withholding allowances. The withholding deduction is calculated as follows:
Taxable Gross (See Earnings Statement page for definition of taxable gross.) $3,000.00 Less: amount of one allowance times number of allowances claimed ($250 x 2) (500.00) Amount subject to federal withholding tax $2,500.00 Tax to be withheld from the above table:
$312.90 plus 27% of the amount over $2,471.00
($2,500.00 - 2,471.00 = 29.00; 29.00 x 27% = 7.83; 312.90 +7.83 = $320.73)
$320.73
Example #2: Semi-monthly Pay
An unmarried employee has an hourly rate of $10 per hour. She works 40 hours per week. Assume the employee is not eligible for benefits, and that there are no deductions for insurance or retirement, other than social security. That is, the employee’s taxable income on October 6 is $800.00 (there were 10 working days in the pay period from 9/16/00 to 9/30/00), and her taxable income on October 20 is $800.00 (again, there were 10 working days from 10/1/00 to 10/15/00). The employee turned in a Form W-4 claiming two withholding allowances. The withholding deduction is calculated as follows:
Withholding on October 6 paycheck
Taxable Gross (See Earnings Statement page for definition of taxable gross.) $800.00 Less: amount of one allowance times number of allowances claimed ($250 x 2) (500.00) Amount subject to federal withholding tax $300.00 Tax to be withheld from the above table:
10% of the amount over $221.00
($300.00 - 221.00 = 79.00; 79.00 x 10% = 7.90)
$7.90
Withholding on October 20 paycheck
Taxable Gross for the month for withholding calculation purposes $1600.00 Less: amount of one allowance times number of allowances claimed ($250 x 2) This allowance has already been taken for the month. (500.00) Amount subject to federal withholding tax $1,100.00 Tax to be withheld from the above table:
$49.20 plus 15% of the amount over $713.00
($1,100.00 - 713..00 = 387.00; 387.00 x 15% = 58.05; $49.20 + 58.05 - 7.90 from above = $99.35)
$99.35
When should I change my Form W-4?
 |
If you had to pay additional taxes when you filed your Form 1040 last year and expect similar circumstances this year. |
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If you had a marital or dependent status change (Please notify Human Resources immediately to ensure appropriate insurance coverage.) |
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If you got a substantial refund from the IRS last year and expect similar circumstances this year. |
| If you expect a lump-sum check for consultant work, and you don't want the marginal tax rate to apply for that pay. Note: if you change your W-4 for that purpose, don't forget to change it back. |
2008 Federal Income Tax Withholding Table
Single person
(including head of household) Married person If the amount of wages (after subtracting withholding
allowances) is: The amount of income tax to withhold is: If the amount of wages (after subtracting withholding
allowances) is: The amount of income tax to withhold is: Not over $221 $0
Not over
$667 $0 Over- But not over- Tax plus tax rate on excess Of excess over- Over- But not over- Tax plus tax rate on excess Of excess over- $221
$858 10% $221
$667
$1,963 10%
$667
$858
$2,830 $63.70 plus 15%
$858
$1,963
$6,013 $129.60 plus 15%
$1,963
$2,830
$6,644 $359.50 plus 25%
$2,830
$6,013
$11,488 $737.10 plus 25%
$6,013
$6,644
$13,875 $1,313.00 plus 28%
$6,644
$11,488
$17,308 $2,105.85 plus 28%
$11,488
$13,875 $3,337.68 plus 33%
$13,875
$17,308 $3,735.45 plus 33%
$17,308
$29,971
$8,649.36
plus 35%
$29,971
$30,425
$8,064.06
plus 35%
$30,425