Instructions For California Withholding Schedules - Method B - Exact Calculation Method - 2001 Page 4
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10CALIFORNIA WITHHOLDING SCHEDULES FOR 2001
METHOD B - EXACT CALCULATION METHOD (continued)
NOTE: Employers may determine the amount of income tax to be withheld for an annual payroll period and figure
the tax for the payroll period. This method may be useful to employers who have employees being paid
for a lump sum, or a yearly amount not withheld on, and want to conserve computer memory by storing
only the annual tax rates, wage brackets, deduction values, and tax credits.
EXAMPLE F:
Annual earnings of $36,000.00, monthly pay period, married, and claiming four allowances on form DE 4 or W-4.
Step 1
Earnings for the annual payroll period are GREATER than the amount shown in "TABLE 1 - LOW INCOME
EXEMPTION TABLE" ($18,582.00); therefore, income tax should be withheld.
Annualized wages and/or monthly salary (12 x $3,000.00) ...................................................
$36,000.00
Step 2
Not applicable – no estimated deduction allowance claimed.
Step 3
Subtract amount from "TABLE 3 - STANDARD DEDUCTION TABLE".................................
-5,622.00
Taxable income .....................................................................................................................
$30,378.00
Step 4
Tax computation from “TABLE 5 - TAX RATE TABLE”:
•
Entry covering $30,378.00 (over $25,878 but not over $40,842)
•
4% of amount over $25,878.00 (.04 x [$30,378 - $25,878]) ...........................................
$
180.00
•
Plus marginal tax amount...............................................................................................
+408.38
•
Computed annual tax .....................................................................................................
$
588.38
Step 5
Subtract amount from "TABLE 4 - EXEMPTION ALLOWANCE TABLE" for
4 regular withholding allowances........................................................................................
-300.00
Annual amount of tax to be withheld .....................................................................................
$
288.38
Divide by number of payroll periods in year (12) ...................................................................
$
24.03
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Method B (INTERNET)
Page 4 of 10
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