# Compute state taxes on a straight percent basis by pptfiles

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```									Lesson Objective
Compute state taxes on a straight percent basis.

Most states require employers to withhold a certain
amount of pay for state income tax. Each state may
calculate this differently, but in the state of Pennsylvania,
Pay and 3.07%.

Tax rates of the 50 states
Lesson 2.2 State Income (Withholding) Tax

State Income (Withholding) Tax
– The percentage deducted from an individual’s paycheck to assist in funding
government agencies within the state
– The percentage deducted depends on the amount of gross pay earned
State Calculations

State Income Tax = Taxable wages x
Tax Rate
Check stub for accuracy:

State Tax / Gross Pay = % Rate

\$40.82 / \$1353.33 = .03016 = 3.02%
What is PA’s State tax rate?
Example 1

•   Patricia’s gross pay is \$65,800 per year. She lives in PA. How
much is withheld from her gross earnings for state income tax each
month?

•   \$65,800 x .0307 = 2020.06 (per year)

•   \$2020.06 ÷ 12 = \$168.34 rounded (per month)

Jack earns \$43,500 per year in PA. How much is withheld
from his gross earnings for state income tax each week?

43,500 x .0307 = \$1335.45 (per year)

\$1,335.45 ÷ 52 = \$25.68 (weekly)
Closure: What is state tax money used
for?
Summarize main point: why, PA state tax rate? How is this collected?

Calculate the state withholding for Jim:

He made \$1200 in gross wages last
week. What was his PA state
withholding?
Assessment

•   Gross wages 50,000 for the year. What amount of PA state tax
should be withheld?