"Iown and operate a construction/remodeling group for the past 15 years and thefollowing was brought up in a meeting today. Sales individuals are given a drawon commission weekly, with no taxes taken. As they make a sale, the commissionsare netted out against the draw and the correct taxes are taken from the net.Is this correct?"

How is it net, if no taxes were taken? That would be the gross.

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Originally Posted by markbyall

"I own and operate a construction/remodeling group for the past 15 years and the following was brought up in a meeting today. Sales individuals are given a draw on commission weekly, with no taxes taken. As they make a sale, the commissions are netted out against the draw and the correct taxes are taken from the net. Is this correct?"

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Well probably not depending on how long it takes to recoup and whether the calculations are made on the gross, The idea of deducting taxes are that they are paid on receipt but you seem to have a nice little tax avoidance scheme where the tax might be collected at some later date. What happens to an employee who fails to keep up? What you should do is collect taxes on the amount paid and adjust when the commission falls due . Basically you are not allowed to assess income, just collect on the amount paid whether that is small one week and big the next, this isn't your call to make adjustments