US backup withholding 24%: $10,000 → $2,400
Backup withholding under IRC 3406 is a flat 24% of a reportable payment when the payee has no valid TIN or the IRS has notified the payer. It is not wage withholding (Form W-4) and not FICA: it is a cut from 1099-style payments (interest, dividends, contractor pay, and similar).
This calculator only applies the rate: withheld = payment × 24% and net = payment − withheld. It does not decide whether backup withholding applies to your facts.
Read the evergreen explainer →
This page covers U.S. IRC 3406 only; it is not Mexico, Guatemala, or Peru withholding.
withheld = reportable payment × 24%
net to payee = payment − withheld
Worked example: $10,000 → $2,400
Reportable payment of $10,000:
- Backup withholding: $10,000 × 0.24 = $2,400
- Net to payee: $10,000 − $2,400 = $7,600
The same 24% applies to $1,000 ($240), $5,000 ($1,200), or $25,000 ($6,000). This tool has no annual wage base cap: the payment amount is the base.
| Reportable payment | 24% withheld | Net |
|---|---|---|
| $500 | $120 | $380 |
| $1,000 | $240 | $760 |
| $5,000 | $1,200 | $3,800 |
| $10,000 | $2,400 | $7,600 |
| $25,000 | $6,000 | $19,000 |
What is in scope
| Item | Backup 24%? | Note |
|---|---|---|
| 1099 interest / dividends | Yes, if 3406 applies | Typical reportable pay |
| 1099-NEC contractor fees | Yes, if 3406 applies | Not a W-2 wage |
| W-2 wages with Form W-4 | No | Use federal withholding / paycheck tools |
| FICA (SS + Medicare) | No | Separate payroll tax |
Quick comparison vs other U.S. cuts
| Tool | Base | Example |
|---|---|---|
| Backup withholding (this page) | Payment × 24% | $10,000 → $2,400 |
| Federal wage withholding (W-4) | Percentage Method / tables | Depends on filing status |
| Employee FICA | 6.2% + 1.45% | On FICA wages |
Short FAQ
Is the rate always 24%? Yes for IRC 3406 in this calculator. $10,000 → $2,400; $1,000 → $240.
When does it usually apply? Missing/incorrect TIN or IRS notice to the payer. This page does not score eligibility—it only multiplies by 24%.
Can the payee recover it? Often credited on the annual return if actual tax is lower; confirm on Form 1040 for your facts. Educational estimate, not tax advice.
Related: US paycheck take-home, federal tax withholding, FICA, estimated tax safe harbor.