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Taxable Wage Base Example - Page 2 of 5
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2nd Quarter:
Calculate each person's excess wages.
- John Smith
- John Smith earned $4,000 in this quarter. Including his first quarter wages, he has earned a total of $8,000 this year. John Smith has no wages over the taxable wage base ($12,000), so none of his wages are excess wages.
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| | Total Wages | Excess Wages |
| Quarter Wages | for the year | for the Quarter |
| $4,000 |
$8,000 |
$0 |
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- Jane Doe
- Jane Doe earned $7,000 in this quarter. Including her first quarter wages, she has earned a total of $14,000 this year. Because Jane Doe has earned more this year than the amount of the taxable wage base ($12,000), the amount above the wage base ($2,000) is excess wages.
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| | Total Wages | $14,000 | Total Wages |
| Quarter Wages | for the year |
-12,000 |
Taxable Wages |
| $7,000 | $14,000 |
$ 2,000 |
Excess Wages |
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Calculate the employer's total wages and total excess wages.
Now that we have the total and excess wages for each worker, we can calculate the employer's total wages and total excess wages for the quarter.
| | Wages this Quarter | Excess Wages |
| John Smith |
$4,000 |
$0 |
| Jane Doe | 7,000 |
2,000 |
| Total |
$11,000 |
$2,000 |
These totals go in item 4, "Total Wages Paid" and 5, "Wages Paid in Excess of $12,000" on the Quarterly Contribution and Wage Report.
Calculate taxable wages.
The total wages paid this quarter minus excess wages gives the employer's taxable wages for the quarter.
| Total Wages | - | Excess Wages | = | Taxable Wages |
| $11,000 |
- |
$2,000 |
= |
$9,000 |
This is item 6, "Taxable Wages" on the Quarterly Contribution and Wage Report.
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