Concept: Tax Withholding for Nonresident Alien Workers (USA)
Workday can calculate U.S. federal withholding for nonresident alien (NRA) employees in
one of 3 ways:
Tax Treatment of NRA Employee | Withholding | Employee Setup in Workday |
|---|---|---|
Treated as a resident for tax purposes. | Same as for U.S. citizens. | Nonresident Alien check box isn’t selected on the
worker's W-4. |
Not treated as a resident for tax purposes. Not covered by a tax
treaty. | Workday adds an additional amount to the earned amount to determine the
taxable wages subject to withholding. | Nonresident Alien check box is selected on the
W-4.Filing status is Single or Married filing separately. |
Not treated as a resident for tax purposes. Covered by a tax
treaty. | Withholding from IRS income code numbers 16, 18, 19, and 20 is based on a
tax treaty. | Tax Treaty is set up for the worker with benefit
amounts and applicable dates. |