Note: This is a printed version of https://isc.uw.edu/your-pay-taxes/withholding/calculating-your-withholding. Please visit this page on the ISC website to ensure you're referencing the most current information.

ISC

Calculating Your Withholding

Last updated Friday, January 5, 2024

Learn How to Calculate Your:

How to Calculate Your Federal Income Tax Withholding

The following guidance pertains to wages paid on January 1, 2023 through December 31, 2023.

1. Calculate your Federal Taxable Gross: Gross Pay minus any Pre-Tax Reductions for Federal Income Tax Withholding*

2. Using your Federal Taxable Gross from the previous step, calculate your Federal Income Tax Withholding per the guidance in IRS Publication 15-T (PDF); you may also find it helpful to refer to Form W-4 (PDF).

*Pre-tax reductions for federal income tax withholding include retirement contributions (PERS, TRS, LEOFF, UWRP), state deferred compensation, pre-tax VIP, pre-tax medical insurance, pre-tax dependent care (DCAP), pre-tax Health Savings Account (HSA), pre-tax Medical Flexible Spending Arrangement (FSA), pre-tax Limited Purpose Flexible Spending Arrangement (LFSA), and pre-tax parking.

Additional Resources From the IRS

You should generally increase your withholding if:

  • You hold more than one job at a time or you and your spouse both have jobs (Step 2) or
  • You have income from sources other than jobs or self-employment that is not subject to withholding (Step 4(a)).

If you do not make adjustments to your withholding for these situations, you will likely owe additional tax when filing your tax return, and you may owe penalties. For income from sources other than jobs, you can pay estimated tax instead of having extra withholding.

You should generally decrease your withholding if:

  • You are eligible for income tax credits such as the child tax credit or credit for other dependents (Step 3), and/or
  • You are eligible for deductions other than the basic standard deduction, such as itemized deductions, the deduction for IRA contributions, or the deduction for student loan interest (Step 4(b)).

Refer to the IRS website for additional information and FAQs.

The IRS encourages everyone to use their Tax Withholding Estimator to perform a “paycheck checkup,” and help you make sure you have the right amount of tax withheld from your paycheck. The ISC recommends using this tool before completing your W-4 in Workday.

There are several reasons to check your withholding:

  • Checking your withholding can help protect against having too little tax withheld and facing an unexpected tax bill or penalty at tax time next year.
  • At the same time, you may prefer to have less tax withheld up front, so you receive more in your paychecks and get a smaller refund at tax time.

It is especially important for anyone who faced an unexpected tax bill when they filed earlier this year, and for anyone that had a major life change ― such as marriage or divorce, a new job, new home purchase, or birth of a child. People who itemized in the past but who now may take the standard deduction are also at higher risk of unexpected tax-due returns, as are households in which both spouses work, and employees with other sources of income or complex tax situations.

Taxpayers should first gather the last pay statements for themselves and their spouse, as well as the most recent tax return filed. Then, visit the Tax Withholding Estimator. Keep in mind that the Tax Withholding Estimator’s results will only be as accurate as the information you entered. The recommendations in this tool are designed to correct your withholding for the rest of this year based on whether you have had too much or too little federal income tax withheld to date. These adjustments are usually appropriate for a full year (unless you have had changes in employment or filing status), so you should use this estimator again at the beginning of next year to determine the appropriate full year amount.

How to Calculate Your Social Security/Medicare Withholding

For the 2023 Tax Year (wages paid Jan 1, 2023 through Dec 31, 2023)

To calculate the amount of Social Security and/or Medicare withheld from your paycheck, calculate your Taxable Gross: Gross Pay minus any Pre-Tax Reductions for Social Security/Medicare.*

Then, determine your tax:

  • Social Security is calculated at 6.2% of Taxable Gross up to $160,200.00. The maximum tax possible is $9,932.40.
  • Medicare is calculated at 1.45% of Taxable Gross up to $200,000. Then, Medicare is calculated at 2.35% of Taxable Gross over $200,000 (no limit).

For the 2024 Tax Year (wages paid Jan 1, 2024 through Dec 31, 2024)

To calculate the amount of Social Security and/or Medicare withheld from your paycheck, calculate your Taxable Gross: Gross Pay minus any Pre-Tax Reductions for Social Security/Medicare.*

Then, determine your tax:

  • Social Security is calculated at 6.2% of Taxable Gross up to $168,600.00. The maximum tax possible is $10,453.20.
  • Medicare is calculated at 1.45% of Taxable Gross up to $200,000. Then, Medicare is calculated at 2.35% of Taxable Gross over $200,000 (no limit).

*Pre-Tax Reductions for Social Security/Medicare include pre-tax medical insurance, pre-tax dependent care (DCAP), pre-tax Health Savings Account (HSA), pre-tax Medical Flexible Spending Arrangement (FSA), pre-tax Limited Purpose Flexible Spending Arrangement (LFSA), and pre-tax parking.

How to Calculate Your Medical Aid (Worker’s Compensation) Withholding

The following guidance pertains to hours worked on January 1, 2024 through December 31, 2024.

To calculate the amount of Medical Aid withheld from your paycheck, multiply the number of hours worked (up to a maximum of 80 hours) by the following rates:

  1. WA Medical Aid Fund: .0454
  2. WA Supplemental Pension Fund: .0855
  3. WA Stay at Work Program: .0015

Note: The sum of all 3 figures is limited to the maximum deduction of $10.59.

Employer Contribution is determined by multiplying .3331 by the number of hours worked, up to a maximum of 80 hours. The maximum contribution possible is $26.25.

How to Calculate Your Paid Family and Medical Leave (PFML) Withholding

For the 2023 Tax Year (wages paid Jan 1, 2023 through Dec 31, 2023)

To calculate the amount of Paid Family Medical Leave withheld from your paycheck, multiply your gross wages by .8%. You pay 72.76% of that 0.8%.

Note that premiums are capped at the 2023 Social Security Wage Base of $160,200; the maximum premium paid for PFML is $932.49. Visit the Premiums Calculator page on the Washington State Paid Family and Medical Leave website for more information.

For the 2024 Tax Year (wages paid Jan 1, 2024 through Dec 31, 2024)

To calculate the amount of Paid Family Medical Leave withheld from your paycheck, multiply your gross wages by .74%. You pay 71.43% of that 0.74%.

Note that premiums are capped at the 2024 Social Security Wage Base of $168,600.00; the maximum premium paid for PFML is $891.19. Visit the Premiums Calculator page on the Washington State Paid Family and Medical Leave website for more information.

How to Calculate Your WA Cares Fund (Long-Term Care tax) Withholding

All Washington State employees will pay up to $0.58 per $100 of earnings.

If you have an approved exemption from Washington’s Employment Security Department (ESD), let the ISC know by completing the WA Cares Exemption Approval Submission form.

Related Info

As a reminder, the ISC cannot provide tax or financial planning advice.