Withholding allowances is an exemption that reduces the amount of income tax an employer deducts from employee’s paycheck. The exemptions from federal income tax can be claimed on Form W-4. Based on the exemptions an employee claims, the federal income tax will be withheld from their wages.

 Most of the states allow same withholding allowances like federal according to Form W-4 that calculates the state income tax. To claim different allowances or additional tax amount, an additional form for that state will have to be submitted.


Here’s how to add withholding allowances for an employee:


  1. Go to Directory >> Employee. 

  2. Select an employee for whom Federal and State withholding allowances have to be added.

  3. In the Job Details tabunder Federal Withholding Allowances section, click.

  4. Select whether the employee claims an exemption from withholding for the current tax year, select filling status, enter total allowances, and additional withholding amount.

  5. Click Save

  6. Under State withholding allowances section, click

  7. Select whether the employee claims an exemption from withholding for the current tax year, select filling status, enter total allowances, and additional withholding amount.

  8. Click Save


The federal and state withholding allowances for the employee are added with the possibility to edit in the future.  


FAQ:


1) Would an employee be able to add the withholding allowances?

Yes. This can be done through myPayWow for which the employee should have access.