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Information for Employers

Taxable Wage Base Example - Page 4 of 5

Introduction · 1st Quarter · 2nd Quarter · 3rd Quarter · 4th Quarter · Yearly Summary

4th Quarter:

  1. Calculate each person's excess wages.

    John Smith
    John Smith earned $3,500 in this quarter. Including his first, second and third quarter wages, he has earned a total of $15,500 this year. Because John Smith has earned more this year than the amount of the taxable wage base ($12,000), everything above the wage base ($12,000) is excess wages. However, excess wages to be reported are the amount earned over the taxable wage base in a quarter, so John Smith's excess wage amount this quarter is $3,500. An employee's excess wages in a quarter can NEVER be more than the amount of wages he or she received that quarter.
     
     Total WagesExcess Wages
    Quarter Wagesfor the yearfor the Quarter
    $3,500 $15,500 $3,500
     
    Jane Doe
    Jane Doe earned $4,000 in this quarter. Including her first, second and third quarter wages, she has earned a total of $18,000 this year. Because Jane Doe has earned more this year than the amount of the taxable wage base ($12,000), everything above the wage base ($12,000) is excess wages. However, like John Smith, Jane Doe's excess wage amount to be reported is the amount earned over the taxable wage base in this quarter, so her excess wage amount this quarter is $4,000. An employee's excess wages in a quarter can NEVER be more than the amount of wages he or she received that quarter.
     
     Total WagesExcess Wages
    Quarter Wagesfor the yearfor the Quarter
    $4,000$18,000$4,000
     

  2. 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 QuarterExcess Wages
    John Smith$3,500$3,500
    Jane Doe4,0004,000
    Total$7,500$7,500

    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.

  3. 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
    $7,500-$7,500=$0

    This is item 6, "Taxable Wages" on the Quarterly Contribution and Wage Report.

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