Two formula tables for percentage method withholding are on pages 23 and 24. The differences in the Alternative Percentage Method formulas and the steps for figuring withheld tax for different payroll systems are shown in this example.

MARRIED PERSON
(Weekly Payroll Period)

If wages exceeding the allowance amount are over $124 but not over $355:
Method:		Income Tax Withheld:
Percentage (Pub. 15)		10% of excess over $124
Alternative 1 (Page 23)		10% of such wages minus $12.40
Alternative 2 (Page 24)		Such wages minus $124, times 10% of remainder

When employers use the percentage method in Circular E or the formula tables for percentage method withholding in this publication, the tax for the pay period may be rounded to the nearest dollar. If rounding is used, it must be used consistently. Withheld tax amounts should be rounded to the nearest whole dollar by (1) dropping amounts under 50 cents and (2) increasing amounts from 50 to 99 cents to the next higher dollar. This rounding will be considered to meet the tolerances under section 3402(h)(4).

Formula Tables 1

Formula Tables 2

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