- 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 $16,500 this year. Because John Smith has earned more this year than the amount of the taxable wage base ($13,000), $3,500 above the wage base ($13,000) is excess wages.Quarter Wages Total Wages for the year Taxable Wages for the year Excess Wages for the Quarter $3,500 $16,500 -$13,000 $ 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 ($13,000), everything above the wage base ($13,000) is excess wages. However, 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.Quarter Wages Total Wages for the year Taxable Wages for the year Excess Wages for the Quarter $4,000 $18,000 -$13,000 $4,000 - 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 $3,500 $3,500 Jane Doe $4,000 $4,000 Total $7,500 $7,500 These totals go in item 4, "Total Wages Paid" and 5, "Wages Paid in Excess of $13,000" 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 $7,500 - $7,500 = $0 This is item 6, "Taxable Wages" on the Quarterly Contribution and Wage Report.
