Employee Withholding

[KBTS]

I just got a new payroll client. Two employees are hourly and get paid weekly, so no problem there. The other employee gets paid commission each time they close a loan. This means they might get paid every week or maybe once a month (or less) depending on how good they are at their job. Which table should I use to calculate Federal Income Tax withholding from their checks- weekly, bi-weekly, monthly?

Thanks

[veritas]

See Circular E (Pub 15) under supplemental wages.

[S T]

Labor Laws

Before you check how to withhold, you might need to research your State Labor Laws. There are guidelines about the employee receiving at least a minimum wage on a regular pay frequency.

What some employers do is issue a draw (advance)check bi-weekly or semi-monthly, then the commission check at the end of the month. Commission check is reduced by the prior draw check. Then you could establish what payroll withholding table to use, bi-weekly, semi-monthly, etc.

You might find more info at http://www.laborlawtalk.com/

Sandy

[JG EA]

The other employee gets paid commission each time they close a loan. This means they might get paid every week or maybe once a month (or less) depending on how good they are at their job. Thanks

The way I do this: I check on how often the employee would get paid if they received compensation every day (in this case by closing many loans.) Would they then be paid weekly like the other employees? In your statement they could be paid every week. So, I would use the weekly chart. But, if their arrangement is to be paid on a monthly basis, then use that chart.