Federal Tax Withholding Calculations | American Funds

Federal Tax Withholding Calculations

Federal income tax withholdings are calculated by:

  1. Multiplying gross pay by the number of pay periods per year to compute your annual salary.
  2. Subtracting the value of allowances allowed (for 2017, this is $4,050 multiplied by the number of withholding allowances claimed).
  3. Determining your annual tax by using the single or married rate tables below.
  4. Dividing the amount of tax by the number of pay periods per year to arrive at the amount of federal withholding tax to be deducted per pay period.

Single Withholding Rates for 2017*

Annual Taxable Income Between These Amounts Annual Withholding Withhold Additional Percent of Income Over This Amount
$0–$2,300 $0.00 0% $0
$2,301–$11,625 $0.00 10% $2,300
$11,626–$40,250 $932.50 15% $11,625
$40,251–$94,200 $5,226.25 25% $40,250
$94,201–$193,950 $18,713.75 28% $94,200
$193,951–$419,000 $46,643.75 33% $193,950
$419,001–$420,700 $120,910.25 35% $419,000
$420,701 and over $121,505.25 39.60% $420,700

Married Withholding Rates for 2017*

Annual Taxable Income Between These Amounts Annual Withholding Withhold Additional Percent of Income Over This Amount
$0–$8,650 $0.00 0% $0
$8,651–$27,300 $0.00 10% $8,650
$27,301–$84,550 $1,865.00 15% $27,300
$84,551–$161,750 $10,452.50 25% $84,550
$161,751–$242,000 $29,752.50 28% $161,750
$242,001–$425,350 $52,222.50 33% $242,000
$425,351–$479,350 $112,728.00 35% $425,350
$479,351 and over $131,628.00 39.60% $479,350

*This information is subject to change by the IRS.