Every employer who pays income subject to withholding holds back part of an employee’s wages and sends it to the Tax Commission. This section describes how to determine the amount to withhold.
Form W-4
You must have a federal Form W-4, Employee’s Withholding Allowance Certificate, on file for each employee. We strongly encourage you to have all your employees use the most recent Form ID W-4 to update their Idaho withholding.
Read more at Update Your W-4.
Ways to compute withholding
You can use any of the following methods to compute Idaho withholding:
- Percentage Computation method — This might be the best way if you’re programming withholding tables on your computer. Round to the nearest whole dollar. See the Table for Percentage Computation Method of Withholding.
- Annualized Wage method — Round to nearest whole dollar.
- Wage Bracket method. See the Table for Wage Bracket Method of Withholding.
Effective date of withholding tables
We revise withholding tables as needed, and it’s usually partway into a year. When we issue a new table, you don’t need to adjust withholding back to the beginning of the year. Just use the new table going forward.
Idaho Child Tax Credit Allowance Table (ICTCAT)
See this table in the detailed computation instructions.
| Payroll period | One withholding allowance |
|---|---|
| Weekly | $67.97 |
| Biweekly | $135.94 |
| Semimonthly | $147.27 |
| Monthly | $294.54 |
| Annual | $3,534 |
| Daily/Misc. | $13.59 (each day) |
Supplemental wages
Idaho income tax applies to bonuses, commissions, overtime pay, payments for accumulated sick leave, severance pay, awards, prizes, back pay, retroactive pay, and other similar payments the employee earned while working in Idaho.
Compute withholding one of these ways:
- Combine the supplemental payment with regular wages and treat it as a single payment.
- Multiply the separately-issued supplemental payment by 5.8%.
Percentage Computation method
Calculate your employees’ withholding according to the number of Idaho withholding allowances they entered on their Form ID W-4.
No withholding allowances
- Find the
correct chart for your payroll frequency. - Choose the correct chart for the employee’s withholding status.
- Select the row corresponding with the employee’s wages.
- Complete the calculation to determine the correct amount of Idaho income tax to withhold.
Any withholding allowances
- Determine the number of Idaho withholding allowances on the employee’s Form ID W-4.
- Check the ICTCAT above. Multiply the employee’s number of Idaho withholding allowances by the appropriate amount according to your payroll frequency.
- Find the correct chart for your payroll frequency.
- Choose the correct chart for the employee’s withholding status.
- Subtract the result from step 2 from the employee’s wages.
- Select the row corresponding with the employee’s wages reduced by step 5.
- Complete the calculation to determine the correct amount of Idaho income tax to withhold.
EXAMPLE
An unmarried employee is paid $1,212 biweekly and claims four Idaho withholding allowances on his Form ID W-4.
| 1. Total wage payment | $1,212 |
| 2. One allowance (from the ICTCAT) | $135.94 |
| 3. Idaho allowances claimed on ID W-4 | 4 |
| 4. Multiply line 2 by line 3 | $543.76 |
| 5. Amount subject to withholding subtract total allowances, line 4, from wages, line 1 | $668.24 |
| 6. Tax to withhold (from charts) 5.8% of the amount over $533 | $8 |
Annualized Wage method
- Multiply the wages for the pay period by the number of pay periods in the calendar year.
- Subtract the Idaho Child Tax Credit allowances from the gross wages to determine the amount subject to withholding.
- Use this figure and the annual tables to compute the amount of withholding required.
- Divide that amount by the number of pay periods in the calendar year. The result will be the amount of withholding for the current pay period.
EXAMPLE
A married person is paid $1,000 per week and claims four Idaho withholding allowances on his Form ID W-4.
| 1. Total annual wages ($1,000 x 52 weeks) | $52,000 |
| 2. One annual allowance (from ICTCAT) | $3,534 |
| 3. Idaho allowance(s) claimed on ID W-4 | 4 |
| 4. Multiply line 2 by line 3 | $14,136 |
| 5. Amount subject to withholding (line 1 – line 4) | $37,864 |
| 6. Tax from (from annual table) 5.8% of the amount over $27,700 | $590 |
| 7. Amount to be withheld each week $590 divided by 52…remember to round | $11 |
Wage Bracket method
The Idaho withholding allowances used in the Wage Bracket method are the number of children who qualify for the Idaho Child Tax credit. The employee enters this number on line 5 of the ID W-4.
No withholding allowances
- Find the correct chart for your payroll frequency and the employee’s withholding status.
- Select the row corresponding with the employee’s wages.
- Choose the figure in the “0” column to determine the correct amount of Idaho income tax to withhold.
Any withholding allowances
- Find the correct chart for your payroll frequency and the employee’s withholding status.
- Select the row corresponding with the employee’s wages.
- Determine the number of Idaho withholding allowances on the employee’s Form ID W-4.
- The correct column is the one matching the number of Idaho withholding allowances (step 3). This gives you the correct amount of Idaho income tax to withhold.
More than 10 allowances
The chart covers up to 10 allowances. If an employee claims more than 10 allowances:
- Multiply the number of withholding allowances over 10 by the amount from the ICTCAT above.
- Subtract the result from the gross wages to get the adjusted gross wages.
- Use the adjusted gross wages and the column for 10 allowances to determine the withholding amount.
If the wages exceed the amount shown in the last bracket of the table, use the Percentage Computation method instead.
Payroll software
Contact the company that sold you the software for help with the software.