How is Virginia withholding tax calculated for employees?

Virginia withholding tax is calculated based on employees’ taxable wages and the Virginia income tax rates. Employers should consider:

1. Gross Wages: Total compensation subject to Virginia state income tax.

2. Allowances/Exemptions: Claimed by employees on Form VA-4 (Employee’s Virginia Withholding Exemption Certificate).

3. Withholding Tables or Formulas: Employers use the Virginia withholding tax tables provided by the Virginia Department of Taxation or the formula methods to determine the exact amount to withhold per pay period.

4. Adjustments: Any prior overpayments or underpayments may be factored in when filing Form VA-5Q.

Employers are responsible for withholding the correct amount each pay period and remitting it quarterly using Form VA-5Q. Proper calculation helps avoid penalties and interest.