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Treasury Regulations · 26 CFR

§ 31.3402(h)(2)-1. Withholding on basis of annualized wages.

In effect eCFR current as of October 15, 2026

Regulation text, no changes From the eCFR, current as of October 15, 2026. The eCFR is an authoritative but unofficial editorial compilation of the Code of Federal Regulations; the official text is the annual CFR on govinfo. Compare it with this section on ecfr.gov (external site) or the official annual CFR on govinfo (external site).

Regulation under 26 U.S.C. § 3402(h)(2)

Cite as 26 CFR § 31.3402(h)(2)-1

At a glance

Read from the text and its source citation. Not part of the regulation.

Status
In the current eCFR
Issued
July 21, 1970 by T.D. 7053
Issued under
26 U.S.C. § 3402(h)(2)
Length
281 words · about 1 min to read
Cross-references
cites 1 Code section and 0 regulations; cited by 1

An employer may determine the amount of tax to be deducted and withheld upon a payment of wages to an employee by taking the following steps:

Step 1. Multiply the amount of the employee's wages for the payroll period by the number of such periods in the calendar year.

Step 2. Determine the amount of tax which would be required to be deducted and withheld upon the amount determined in Step 1 if that amount constituted the actual wages for the calendar year and the payroll period of the employee were an annual payroll period.

Step 3. Divide the amount of tax determined in Step 2 by the number of periods by which the employee's wages were multiplied in Step 1.

Example.

On July 1, 1970, A, a single person who is on a weekly payroll period and claims one exemption, receives wages of $100 from X Co., his employer. X Co. multiplies the weekly wage of $100 by 52 weeks to determine an annual wage of $5,200. It then subtracts $650 for A's withholding exemption and arrives at a balance of $4,550. The applicable table in section 3402(a) for annual payroll periods indicates that the amount of tax to be withheld thereon is $376 plus $314.50 (17 percent of excess over $2,700), or a total of $690.50. The annual tax of $690.50, when divided by 52 to arrive at the portion thereof attributable to the weekly payroll period, equals $13.28. X Co. may, if it chooses, withhold $13.28 rather than the amount specified in section 3402 (a) or (c) for a weekly payroll period.

[T.D. 7053, 35 FR 11627, July 21, 1970]

Other regulations under § 3402

Cross-references

Computed from the citations in the text of 26 CFR.

Code sections it cites

Cited by 1 other regulation

Amendment history

From the source citation at the end of the section, newest first. T.D. is a Treasury decision; FR is the Federal Register.

  1. Issued by T.D. 7053 (35 FR 11627)

Where it sits in 26 CFR

  1. Subchapter C Employment taxes and collection of income tax at source
  2. Part 31 Employment taxes and collection of income tax at source
  3. Subpart E Collection of Income Tax at Source

Nearby sections