Withholding Tax = ( (Taxable Income - Bracket or Exemption ) x %over ) + Bracket Tax or Base Tax
I created the following advanced percent (tax bracket alt.) in Timetrex (annual values based on the semi-monthly data the government provided):
- S/ME-5: Percent 20%; Greater than: 120,000; Less than: 190,008; Fixed: 8,500.08
- S/ME-6: Percent 25%; Greater than: 190,008; Less than: 300,000; Fixed: 22,500.00
- S/ME-7: Percent 30%; Greater than: 300,000; Less than: 550,008; Fixed: 49,999.92
- S/ME-8: Percent 32%; Greater than: 550,008; Less than: no limit; Fixed: 124,999.92
Pay Period = semi-monthly
Taxable income = 7,500 (current payroll period)
Overtime = 6,230.88
Multiplying the taxable income by 24 should put it in the S/ME-5 bracket. Here's the manual computation:
Basic Pay = 7,500.00
Overtime = 6,230.88
Excess of basic = 8,730.88
Tax on 7,500 = 354.17
Tax on excess = 1,746.18
TOTAL Tax = 2,100.35
But Timetrex computed the tax at 2,452.59 or a difference of 352.24!
Can you please help me how to setup the proper tax tables?
Thanks!