Reporting Wages - Excess Wages
Computing Excess Wages for the Quarterly Unemployment Tax and Wage Report
On the quarterly Unemployment Tax and Wage Report, item C2 (Subtract Excess Wages) instructs you to enter the total amount of wages you paid to all your employees during the quarter being reported that is in excess of the first $8,000 ($7,000 before January 1, 2023). The total quarterly excess wages amount cannot exceed the total wages paid in the quarter (Item C1 on the report).
Example: The following example shows how excess wages are calculated for an employee who is paid $5,000 per quarter. The taxable wage base for the illustrated is $8,000.
| Section C. Wage Summary | 1st Quarter | 2nd Quarter | 3rd Quarter | 4th Quarter | Year End Total |
|---|---|---|---|---|---|
| (Line 1) Total Wages | $5,000.00 | $5,000.00 | $5,000.00 | $5,000.00 | $20,000.00 |
| (Line 2) Excess Wages | 0.00 | $2,000.00 | $5,000.00 | $5,000.00 | $12,000.00 |
| (Line 3) Taxable Wages | $5,000.00 | $3,000.00 | 0.00 | 0.00 | $8,000.00 |
Taxable wages were paid to this worker in the first two quarters, with $2,000 ($10,000-$8,000) excess wages paid in the second quarter. All wages paid in the third and fourth quarter are excess wages.
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