5. Percentage Method Tables for Manual Payroll Systems With Forms W-4 From 2019 or Earlier

If you compute payroll manually and your employee has not submitted a Form W-4 for 2020 or later, and you prefer to use the Percentage Method or you can’t use the Wage Bracket Method tables because the employee’s annual wages exceed the amount from the last bracket of the table (based on marital status and pay period) or the employee claimed more than 10 allowances, use the worksheet below and the Percentage Method tables that follow to figure federal income tax withholding. This method works for any number of withholding allowances claimed and any amount of wages.

Periodic payments of pensions or annuities with a 2021 or earlier Form W-4P.

In lieu of Worksheet 1B and the Percentage Method tables in section 1 , you may use Worksheet 5 and the Percentage Method tables in this section to figure federal income tax withholding on periodic payments of pensions or annuities with a 2021 or earlier Form W-4P. As an alternative, if you prefer to use the Wage Bracket Method of withholding, you may use Worksheet 3 and the Wage Bracket Method tables in section 3 to figure federal income tax withholding on periodic payments of pensions or annuities with a 2021 or earlier Form W-4P.