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Taxable Wage Base Example - Page 5 of 5
Introduction · 1st Quarter · 2nd Quarter · 3rd Quarter · 4th Quarter · Yearly Summary
Calculating Total, Excess, and Taxable Wages - Yearly Summary
This page is a summary of the quarterly figures on pages 1 through 4.
Calculate excess wages.
- John Smith
- The amount of excess wages in any quarter depends on the total wages the worker has earned in the year. Once a worker earns as much as the taxable wage base ($12,000), anything earned after that is excess wages. However, you report only the excess wages earned by the employee in a quarter, so an employee's excess wage amount is never more than the wages for the quarter.
| |
| | Quarter Wages | Total Wages
for the year | Excess Wages
for the Quarter |
| 1st Quarter | $4,000 | $4,000 | $0 |
| 2nd Quarter |
$4,000 |
$8,000 |
$0 |
| 3rd Quarter |
$4,000 |
$12,000 |
$0 |
| 4th Quarter |
$3,500 |
$15,500 |
$3,500 |
| |
- Jane Doe
- Jane Doe has excess wages in the second quarter because she earned wages above the taxable wage base ($12,000). She had no wages in the third quarter, so she had no wages in excess of the taxable wage base that quarter. In the fourth quarter, all Jane Doe's wages were excess wages (when an employee has earned more than the taxable wage base, the wages in subsequent quarters will all be excess wages).
| | Quarter Wages | Total Wages
Total Wages | Excess Wages
for the Quarter |
| 1st Quarter | $7,000 | $7,000 | $0 |
| 2nd Quarter |
$7,000 |
$14,000 |
$2,000 |
| 3rd Quarter |
$0 |
$14,000 |
$0 |
| 4th Quarter |
$4,000 |
$18,000 |
$4,000 |
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Calculate the employer's total wages and total excess wages.
Since we have the total and excess wages of both employees for each quarter, we can calculate the employer's total wages and total excess wages for each quarter. These would be item 4, "Total Wages Paid" and 5, "Wages Paid in Excess of $12,000" on the Quarterly Contribution and Wage Reports.
| Total Wages |
| | 1st Quarter | 2nd Quarter | 3rd Quarter | 4th Quarter |
| John Smith | $4,000 |
$4,000 |
$4,000 | $3,500 |
| Jane Doe |
$7,000 |
$7,000 |
$0 |
$4,000 |
| Quarter Total | $11,000 |
$11,000 |
$4,000 | $7,500 |
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| Excess Wages |
| | 1st Quarter | 2nd Quarter | 3rd Quarter | 4th Quarter |
| John Smith | $0 | $0 | $0 | $3,500 |
| Jane Doe |
$0 |
$2,000 |
$0 |
$4,000 |
| Quarter Total | $0 |
$2,000 |
$0 | $7,500 |
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Calculate Taxable Wages.
The total wages paid each quarter minus the excess wages for the quarter equals the taxable wages for the quarter. These would be item 6, "Taxable Wages" on the Quarterly Contribution and Wage Reports.
| | Total Wages | - | Excess Wages | = | Taxable Wages |
| 1st Quarter | $11,000 | - | $0 | = | $11,000 |
| 2nd Quarter |
$11,000 |
- |
$2,000 |
= |
$9,000 |
| 3rd Quarter |
$4,000 |
- |
$0 |
= |
$4,000 |
| 4th Quarter |
$7,500 |
- |
$7,500 |
= |
$0 |
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