Example 4-1 Justin Miah, single, is a waiter at Metro American Bar and Grill. In his first week, he earned $350 for 20 hours and had $600 of reported tips. Justin’s employer will withhold Federal Income tax based on the total of $950. Net pay is calculated by subtracting the withholding amounts from employer paid earnings of $350.

Example 4-1
 
Justin Miah, single, is a waiter at Metro American Bar and Grill. In his first week, he earned $350 for 20 hours and had $600 of reported tips. Justin’s employer will withhold Federal Income tax based on the total of $950. Net pay is calculated by subtracting the withholding amounts from employer paid earnings of $350.
 
Example 4-4
 
To use the 2023 Wage Bracket Method for Manual Payroll Systems With Forms W-4 From 2020 or Later using Standard Withholding, follow the steps illustrated below.
 
Step 1
 
Select the withholding table that applies to the employee’s pay period.
 
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Adrienne Huff is married filing jointly (MFJ). She is paid weekly at a rate of $815.
 
Step 2
 
Locate the wage bracket (the first two columns of the table) in which the employee’s gross wages fall.
 
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Locate the appropriate wage bracket (see Figure 4.7):
 
At least $815 but less than $825
 
Step 3
 
Follow the line for the wage bracket across to the right to the column showing the appropriate filing status with standard withholding. Withhold this amount of tax.
 
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Move across the line to the column showing Married Filing Jointly, Standard withholding.
 
The tax to withhold is $29.
 
Justin Matthews is a waiter at the Duluxe Lounge. In his first weekly pay in March, he earned $300.00 for the 40 hours he worked. In addition, he reports his tips for February to his employer ($500.00), and the employer withholds the appropriate taxes for the tips from this first pay in March.
 
Calculate his net take-home pay assuming the employer withheld federal income tax (   wage-bracket,  married filing jointly), social security taxes, and state income tax (2%).
 
Enter deductions beginning with a minus sign (-).
 
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 W-4 From 2020 or Later with Standard Withholding and 2023 FICA rates have been used.
 
Click here to access the Wage-Bracket Method Tables.
 
Line Item Description
 
Amount
 
Gross pay
 
fill in the blank 1 of 6$
 
Federal income tax
 
fill in the blank 2 of 6
 
Social security taxes – OASDI
 
fill in the blank 3 of 6
 
Social security taxes – HI
 
fill in the blank 4 of 6
 
State income tax
 
fill in the blank 5 of 6
 
Net pay
 
fill in the blank 6 of 6$
 
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