Form 150-206-677 - Withholding Tax Percentage Formula - 1998
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1
2Information Circular
April 1998
Withholding Tax
Percentage Formula
Computer formula
1. Wage ........................................................................... $ 15,000
2. Less federal withholding .............................................. – 1,507
The formulas shown here are alternatives to the standard
3. BASE ........................................................................... $ 13,493
tables for computing the withholding for Oregon income
4. Amount of BASE over $6,800 ($13,493 – $6,800) ...... $ 6,693
tax. These allow employers with automated payroll ac-
counting systems to withhold proper amounts of tax
5. Tax on first $6,800 of BASE ........................................ $
400
based on employee wages and payroll periods.
6. Tax on excess (.09 × $6,693) ...................................... +
602
7. Total tax from rates (lines 5 + 6) .................................. $ 1,002
Because of Oregon’s personal income tax structure, a
8. Less personal allowances credit ($90 × 1) .................. –
90
single percentage can’t be used. If you develop your own
9. Net tax to be withheld .................................................. $
912
formula, it must be approved by the Oregon Department
of Revenue.
Example 2: A married employee earns $2,000 per month
and claims two allowances. If the employee’s monthly
To use the formulas for each payroll period, you must
federal withholding is $189, the base wage is $1,811
first figure a “base wage” (BASE) amount. The base wage
($2,000 – $189). The amount of Oregon monthly with-
is the employee’s wage minus federal tax withheld. The
holding is $109.
federal tax deduction can’t be more than $3,000 per year.
That’s because Oregon personal income tax law limits
WH = $59 + [.09 × (BASE – $1,083)] – ($7.50 × allowances)
the amount of federal income tax subtracted from fed-
WH = $59 plus [.09 times ($1,811 – $1,083)] minus ($7.50 times 2)
eral adjusted gross income (AGI). For payroll periods of
Employees who need to have additional state withhold-
less than a year, the limit on federal tax withheld changes
ing can request circular 150-206-643 for more information.
to reflect the shorter payroll period.
Questions?
For example: The monthly federal withholding maximum
is $250 ($3,000 ÷ 12). If you have a single employee who
(503) 378-4988
Call:
Salem
is (1) earning $3,750 per month and (2) claiming two
allowances, federal withholding is more than $250. So
1-800-356-4222
Toll-free within Oregon
the base wage (BASE) is $3,500 ($3,750 – $250).
The toll-free number is only available January
through April.
Once you figure the base wage, use it in the formulas
to compute your Oregon withholding (WH).
TTY (hearing or speech impaired only). These numbers
are answered by machine only and are not for voice
Example 1: A single employee has an annual wage of
use. The year-round toll-free number within Oregon is
$15,000 and claims one allowance. If the federal withhold-
1-800-886-7204. In Salem, the number is (503) 945-8617.
ing for this employee is $1,507 (from the federal tables
or formulas), then the BASE is $13,493 ($15,000 – $1,507).
Habla Español? Las personas que necesitan asistencia
The amount of annual Oregon withholding, using the for-
en Español pueden dejar un mensaje. El número
mula, would be $912:
disponible todo el año en Salem es (503) 945-8618.
WH = $400 + [.09 × (BASE – $6,800)] – ($90 × allowances)
A message line is available all year for those who
WH = $400 plus [.09 times ($13,493 – $6,800)] minus ($90 times 1)
need assistance in Spanish. The number in Salem is
You can also figure Oregon withholding for this em-
(503) 945-8618.
ployee as follows:
In compliance with the Americans with Disabilities Act
(ADA), this information is available in alternative formats
upon request by calling (503) 378-4988.
Our Internet address is:
150-206-677 (Rev. 4-98)
(over)
Salem OR 97310
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