withholding tax

American  

noun

1. that part of an employee's tax liability withheld by the employer from wages or salary and paid directly to the government.

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withholding tax British  

noun

1. tax deducted at source from income, esp from dividends, paid to nonresidents of a country, which may be reclaimed if a double-taxation agreement exists between the country in which the income is paid and the country of residence of the recipient

2. a portion of an employee's tax liability paid directly to the government by the employer

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withholding tax Cultural  

1. The tax withheld (or deducted) directly from one's paycheck.

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Other Word Forms

• unwithholding
  adjective

Etymology

Origin of withholding tax

First recorded in 1940–45

Example Sentences

One caveat for U.S. investors: CNQ dividends face a 15% Canadian withholding tax outside retirement accounts.

From MarketWatch • Oct. 9, 2025

The schemes typically involve the rapid sale of large volumes of shares from one investor to another immediately before the payment of a dividend, enabling duplicated claims of the withholding tax.

From BBC • Dec. 12, 2024

In several states, including North Carolina, Ohio, and New York, public university systems refer patients to other state agencies for legal action or withholding tax refunds.

From Salon • Dec. 22, 2022

Its impact is diminished because awards are subject to a federal withholding tax, meaning that 37 percent of the dollars appropriated to this program go right back to the U.S.

From Washington Post • Dec. 20, 2022

Because the company's headquarters and tax home are now in the Netherlands, dividends it pays on its "A" shares are subject to a 15% Dutch withholding tax.

From Reuters • Dec. 10, 2021