Withholding Tax

What Does Withholding Tax Mean?
1. Income tax withheld from employees' wages and paid directly to the government by the employer.

2. A tax levied on income (interest and dividends) from securities owned by a non-resident.

Investopedia explains Withholding Tax
1. The amount withheld is a credit against the income taxes the employee must pay during the year.

2. Tax is deducted not only from dividends, but from other income paid to non-residents of a country.

Related Terms

After-Tax Income
Dividend
Income Tax
Internal Revenue Service - IRS
Nonperiodic Distribution
Tax Treaty
W-2 Form
W-4 Form
Withholding
Withholding Allowance
More Related Terms

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