Example 43
To compute the tax using the 2023 Percentage Method for Manual Payroll Systems With Forms W4 From 2020 or Later using Standard Withholding Rate Schedules, follow the steps illustrated below.
Step 1  
Determine the amount of gross wages earned, filing status, adjustments on Form W4, and frequency of pay. Note: If the wage ends in a fractional dollar amount, the wage may be rounded to the nearest dollar. However, in this text, exact wages are used.  ➡  Wilson Goodman, single (S), has no adjustments on his Form W4 and earns $915.60 semimonthly. 
Step 2  ➡  Compute tax from Tax Table A, Semimonthly, Standard Withholding Rate Schedule, page T3. ($915.60 – $577.00 = $338.60 × 10% = $33.86 + $0) = $33.86 
Use the
percentage method
to compute the federal income taxes to withhold from the wages or salaries of each employee.
If an amount is zero, enter “0”. If required, round your calculations and final answers to the nearest cent.
As we go to press, the federal income tax rates for 2024 are being determined by budget talks in Washington, and are not available for publication. For this edition, the 2023 federal income tax tables for Manual Systems with Forms W4 From 2020 or Later with Standard Withholding and 2023 FICA rates have been used.
Click here to access the Percentage Method Tables.



No. of Withholding 

Amount  
1  James, A.  MFJ  N/A  $1,610  weekly  fill in the blank 1 of 4$ 
2  Lake, R.  S  N/A  825  biweekly  fill in the blank 2 of 4 
3  Walls, S.  MFJ  N/A  925  semimonthly  fill in the blank 3 of 4 
4  Free, Y.  MFJ  N/A  2,875  monthly  fill in the blank 4 of 4 