What Is the Percentage Taken Out for Taxes on a Paycheck?
Quick Answer
Precise percentages vary based on state, but according to the Ventures Scholars Program, four primary taxes are withheld from paychecks: federal income tax, state income tax, social security tax and Medicare tax. According to The Law Dictionary, taxes are withheld on a sliding scale that extracts more income from higher-earning individuals, topping out at 39.6 percent in 2014.
Continue Reading
Full Answer
The IRS website provides a calculator that allows employees to determine whether the correct amount of federal income tax is being withheld. Withholding tax is paid out of an employee's wages directly from the employer to the IRS and is used to fund social security, Medicare, unemployment compensation and worker's compensation. The amount is determined by the W-4 form, which is used by employers to calculate how much to deduct. The IRS recommends that a new W-4 be submitted whenever an employee's financial situation changes. The W-4 also allows filers to control to some extent how much is withheld, but the U.S. Tax Center advises that the withholding tax match the actual tax liability as closely as possible. While receiving a large tax refund is enjoyable, tax refunds are interest-free loans provided to the government. Withholding too little results in owing the IRS, who may also charge penalties and interest.
Learn more about TaxesRelated Questions
-
Q:
How Do You Manually Calculate Payroll Taxes?
A: Payroll taxes are calculated by adding up federal income tax, state and local income taxes using the filer's state’s formula, Social Security and Medicare ... Full Answer >Filed Under: -
Q:
How Do You File State Taxes?
A: Depending on your state, you may file your state taxes with a state income tax form or you can file electronically with online tax software, as the Federat... Full Answer >Filed Under: -
Q:
What Are Some Duties of the NJ Division of Taxation?
A: The New Jersey Division of Taxation is responsible for assessing and collecting individual and business taxes, processing income tax forms, distributing re... Full Answer >Filed Under: -
Q:
What Percentage of Taxes Are Taken Out of Your Paycheck?
A: The percentage of taxes taken out a paycheck depends heavily on the employee's federal, state and local tax brackets for income and filing status, as well ... Full Answer >Filed Under:
You May Also Like
-
Q:
How Do You File Your Illinois Taxes?
-
Q:
How Do You Apply for a PAN Card?
-
Q:
Where Is the Riverside County Tax Collector Located?
-
Q:
How Is the Equivalent Percentage Figure for a Number Determined?
-
Q:
What Is the Percentage of Aluminum in Aluminum Oxide Al2o3?
-
Q:
What Information Is Included in a 2014 Tax Guide?
