Withholding Tax

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What is 'Withholding Tax'

Withholding tax is 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.

BREAKING DOWN '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.

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RELATED FAQS
  1. What is the difference between a single and a married withholding tax?

    Find out how the withholding tax differs for married and single individuals, including examples of how the income tax rate ... Read Answer >>
  2. Where can I find a good withholding tax table on the Internet?

    Learn where to find the most current withholding tax tables and other information about how income tax withholding rates ... Read Answer >>
  3. What is the difference between a state income tax and a federal income tax?

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  4. Who first came up with the idea of a progressive tax?

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