Proper timing for withholding of tax on wages and bonuses
AMONG the income payments where the payor is required to withhold the applicable tax in full is on the payment of compensation by an employer to its officers and employees. This obligation is not difficult to comply since the withholding is done for every payroll period and remittance is made on a monthly basis. And an annualization is made at the end of the year, such that any excess withholding tax made for the previous months has to be returned to the employees and any deficiency in the taxes already withheld has to be deducted on the last payment to the employee for the year.