Section 13: PAYROLL PERIOD


For income tax withholding, the pay period is the period of service for which you ordinarily pay wages to an employee.

If you have a regular payroll period, withhold the income tax on the basis of that period even though the employee does not work the full period.

If you have no payroll period, withhold the tax as if the wages were paid on a daily or miscellaneous payroll period. This method requires a determination of the number of days (including Sundays and state holidays) in the period covered by the wage payment. If the wages are unrelated to a specific length of time (for example, commissions paid on completion of a sale), the number of days must be counted from the date of payment back to the latest of (a) the last payment of wages made during the same calendar year, (b) the date employment commenced if during the same calendar year, or (c) January 2nd of the same year.

If an employee is paid for a period of less than one week and signs a statement under penalties of perjury that he is not working for wages subject to withholding for any other employer during the same calendar week, you may compute the withholding on the basis of weekly, instead of daily or miscellaneous, payroll period. If the employee later begins work for wages subject to withholding for another employer, the employee must notify you within ten days. After that, you must compute the withholding on the basis of the daily or miscellaneous period.

Supplemental Wage Payments