Withholding Tax

AAA

DEFINITION of 'Withholding Tax'

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
  1. Withholding Allowance

    An allowance an individual claims on a W-4 Form. A withholding ...
  2. Pay As You Earn - PAYE

    A system of income tax withholding that requires employers to ...
  3. IRS Publication 550

    A document published by the Internal Revenue Service (IRS) that ...
  4. W-2 Form

    The form that an employer must send to an employee and the IRS ...
  5. W-4 Form

    A form completed by an employee to indicate his or her tax situation ...
  6. Withholding

    The portion of an employee's wages that is not included in his ...
Related Articles
  1. Tax Tips For The Individual Investor
    Retirement

    Tax Tips For The Individual Investor

  2. Next Season, File Taxes On Your Own
    Taxes

    Next Season, File Taxes On Your Own

  3. When You Should Change Your Withholding ...
    Taxes

    When You Should Change Your Withholding ...

  4. The Impact Of U.S. Corporate Taxation ...
    Taxes

    The Impact Of U.S. Corporate Taxation ...

comments powered by Disqus
Hot Definitions
  1. Correlation

    In the world of finance, a statistical measure of how two securities move in relation to each other. Correlations are used ...
  2. Letter Of Credit

    A letter from a bank guaranteeing that a buyer's payment to a seller will be received on time and for the correct amount. ...
  3. Due Diligence - DD

    1. An investigation or audit of a potential investment. Due diligence serves to confirm all material facts in regards to ...
  4. Certificate Of Deposit - CD

    A savings certificate entitling the bearer to receive interest. A CD bears a maturity date, a specified fixed interest rate ...
  5. Days Sales Of Inventory - DSI

    A financial measure of a company's performance that gives investors an idea of how long it takes a company to turn its inventory ...
  6. Accounts Payable - AP

    An accounting entry that represents an entity's obligation to pay off a short-term debt to its creditors. The accounts payable ...
Trading Center