 In this presentation, we will calculate the federal income tax withholding or FIT withholdings. We are here in the payroll register. We're currently calculated up through total earnings, that being the addition of regular pay and overtime pay. Support accounting instruction by clicking the link below, giving you a free month membership to all of the content on our website broken out by category further broken out by course. Each course then organized in a logical, reasonable fashion, making it much more easy to find what you need than can be done on a YouTube page. We also include added resources such as Excel practice problems, PDF files and more like QuickBooks backup files when applicable. So once again, click the link below for a free month membership to our website and all the content on it. And as total earnings, now we're going to go through and calculate the FIT wages. The FIT wages will differ from total earnings, total earnings, including everything, whereas FIT is going to be reduced by some things that would be not includeable in gross pay for our 1040 reporting at the end of the year. Those would be the above the line deductions on our 1040, which would include a cafeteria plan if it was a section 125 plan and the retirement plan. So that's how these two numbers could differ. Note that this is really our full compensation. What we're doing now is trying to reduce it by those things that will reduce our taxable gross income or adjusted gross income. So we're going to do that. First we got to get our FIT and we're going to subtract out the cafeteria plan and retirement plan. I'm just going to give us a number for what the retirement plan deductions will be. These are going to be amounts that are taken out of the employees total earnings in order to arrive at the net check. Typically these are going to be voluntary plans. They're going to be things that aren't required to be pulled out such as FIT, for example, but voluntary things that the employer can offer and the employee can accept to participate in. And if they do it will reduce FIT wages and therefore FIT withholdings and federal income taxes in general. So we're going to say that the cafeteria plan is 250 and we're going to say that the retirement plan is 35. These of course will vary from plan to plan from company to company and employee option to employee option. So then we're going to go to our federal income tax wages and we're going to say that this equals our total wages minus those two items that will be reduced from gross pay for the calculation of federal income taxes. So we'll subtract those out. So here's going to be our FIT page, federal income tax wage. Now we're going to take that and we're going to go to our tables, the good old circular E. This is the circular E. We're looking up that $471.50 in the circular E. Now first we need to find the right place here. So I'm going to scroll down to payroll wages or payroll withholdings in 21 and then I'm just going to keep scrolling down until we find our tables that we're looking for. So here's the percentage tables and we're looking for these tables down here. And we're weekly payees so we're looking for weekly and then we need to know the number of exemptions. So if we go back to our employee, we're saying single one exemption. So single one exemption. So we've got our table here. We have the single bracket for weekly one exemption. Then we're going to look through which bracket we're in here from 0 to 75 or 75, 75 to 80, 80 to 85 and so on and so forth. We're looking for $471. So if we scroll down, looking for 471. So here's 470 to 480. Now this is the zero column. We're looking for one allowance. So I believe it's this 35 we're looking for, this 35 because that's in the one column and it's in between this range. So we'll go back to our Excel sheet then we're going to say 35 is here and that'll be the withholding.