withholding tax

Definition of "withholding tax"
  1. A prepayment of income tax that is deducted from an individual's earnings, fees, or dividends
How to use "withholding tax" in a sentence
  1. A portion of an individual's wage was set aside as a withholding tax to cover potential income tax.
  2. The corporation included a withholding tax when issuing dividends to its shareholders.
  3. To avoid a large tax bill at the end of the financial year, a small business implemented a system of withholding tax from its employees' weekly earnings.

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