Income Tax Withholding

An employer is required to withhold North Dakota income tax from the wages of an employee if federal income tax is required to be withheld from such wages. Wages paid by farmers and ranchers are exempt from North Dakota withholding requirements. North Dakota withholding is computed by using one of three methods allowed employers. Methods 1 and 3 are the perfered methods:

Method 1
Percentage of Wages (Primary Method) - This method is similar to the IRS's Percentage Method in Publication 15 (Circular E).

Method 2
Percent of Federal Withholding (Alternative Method) - This method is an alternative to Method 1, the primary method. It operates in the same way as the percent of federal withholding method that applied before the 2002 tax year. This method generally works for employees with wages under $18,000 if single, or $30,000 if married. Use of this method for employees with wages over the $18,000 or $30,000 level is permitted, but it will result in over withholding.

Method 3
Withholding Tables - This method is identical to Method 1, the primary method, except that no calculations are required. Instead, a table is used to look up the withholding amount. Note: Please download and print the tables that you need. The Tax Department is no longer mailing paper copies, unless requested.