Calculation Methods for State Income Tax

You can use these calculation methods for state income tax (SIT).

Calculation method	Earnings types	What it does
Alternate Annualized	Supplemental	Annualizes the earnings by multiplying them by the annual number of pay periods. Calculates the tax. Divides this amount by the annual number of pay periods.
Alternate Flat Rate	Supplemental	Applies only to California's 10.23% tax on certain Supplemental earnings.
Annualized	Regular Regular and Supplemental Supplemental	Default tax method for Regular earnings. For standard tax calculations: Annualizes the earnings by multiplying them by the annual number of pay periods. Subtracts the applicable allowance and standard deductions. Calculates the tax for the year. Divides this amount by the annual number of pay periods. For period-to-date tax calculations: Includes the earnings in all Regular runs for the period. Applies the Annualized calculation method to them. Subtracts any tax taken in previous runs from this amount.
Annualized Concurrent Aggregation	Regular and Supplemental	Annualizes the Regular earnings by multiplying them by the annual number of pay periods. Adds the Supplemental earnings for this run. Calculates the tax on this amount. Divides this amount by the annual number of pay periods.
Annualized Previous Aggregation	Supplemental	Annualizes the Regular earnings by multiplying them by the annual number of pay periods. Adds the Supplemental earnings for this run. Calculates the tax on this total amount. Annualizes the tax on the preivous run's Regular earnings by multiplying it by the annual number of pay periods. Subtracts in the amount calculated in step 4 from the amount calculated in step 1.
Concurrent Aggregation	Regular and Supplemental	Default method for Regular and Supplemental earnings. Adds the Supplemental earnings to the Regular earnings. Uses the Annualized method to calculate the tax.
Cumulative	Supplemental and Supplemental	Select this method on the State component of the employee's Tax Withholding card. For further info, see Cumulative Tax Withholding in the Help Center.
Flat Rate	Regular Supplemental	Multiplies the earnings by a flat rate percentage.
Flat Rate Combined	Regular and Supplemental	Calculates taxes on Regular earnings using the Annualized method. Calculates taxes on Supplemental earnings using the Flat Rate method.
Percentage of Federal	Supplemental	Multiplies the federal supplemental tax amount by a flat percentage rate. This percentage is unique for each state that uses this method.
Percentage of Federal Combined	Regular and Supplemental	Calculates taxes on Regular earnings using the Annualized method. Calculates taxes on Supplemental earnings using the Percent of Federal method.
Previous Aggregation	Supplemental	Adds the current run's Supplemental earnings to any Regular, Supplemental, or Regular and Supplemental earnings already processed for the current period. These wages are based on each state's legislative requirements. If there are no Regular, Supplemental, or Regular and Supplemental earnings in the current period, it aggregates the Regular earnings from the prior period. Note: Delaware SIT skips this step. If there are no Regular earnings in the prior period, it annualizes the current run's Supplemental earnings against themselves. Calculates the tax. Subtracts any tax already withheld in the current or prior period from this result.
Tiered Flat Rate	Supplemental	Multiplies an employee's wages by a percentage rate. This percentage rate varies based on the amount of an employee's wages.
Tiered Flat Rate Combined	Regular and Supplemental	Calculates taxes on Regular wages using the Annualized method. Calculates taxes on Supplemental wages using the Tiered Flat Rate method.