This document explains how taxes are calculated using the Tax Tables.  These tables come from the US Circular E and your own state & city tax tables.

For this document the example is for a married employee with 3 exemptions.  This employee’s bi-weekly pay after all taxable additions and non-taxable deductions are taken into consideration is $2,000.00.

            USBIMR                    Exempt $        140.38

BIWEEKLY, MARRIED     BREAK                      TAX                RATE

Field 9                                      14642.00                     3880.42           35

Field 10                                    8331.00                       1797.79           33

Field 11                                    4543.00                         737.16           28

Field 12                                    2910.00                         328.90           25

Field 13                                       940.00                          33.40           15

Field 14                                       606.00                                 0           10                               

Field 15 – 20, all zeroes

USBIMR =

• US is for US Federal taxes
• BI is for Bi-weekly pay
• MR is for married

Exempt $ = The amount the government allows to be subtracted from the pay for each exemption being claimed.  Therefore, if the employee is claiming 3 exemptions it would be $140.38 x 3 = $421.14. This $421.14 is subtracted from the employee’s pay before using the table. 

If the employee’s biweekly pay is $2,000.00 and she is claiming 3 exemptions, take the $2,000.00 and subtract $421.14 which equals $1,578.86.   The $1,578.86 is the figure used in the table.

Looking at the above example table, the $1,578.86 is above $940.00 (field 13) but below $2,910.00 (field 12), so the Field 13 row is used.

Subtract the amount under the BREAK column on row Field 13, which is $940.00, from the newly calculated figure.

 $1,578.86

    -940.00

     638.86

Then multiply the $638.86 by the percent in the RATE column on row Field 13, which is 15%.

$638.86 x 15% = $95.82.

The $95.82 is then added to the TAX column on row Field 13, which is $33.40.  Therefore the $95.82 + 33.40 = $129.22.  This is the amount the system will deduct for the Federal Withholding tax.

If the employee has any additional Federal tax (from field 32 on the Employee Master) taken out it will be added to this amount.