Form 145 is one of those documents you sign almost without looking when you start a new job, yet it directly determines how much income tax your employer withholds from you each month. Filling it out correctly avoids both paying unnecessarily more and getting an unpleasant surprise on your annual tax return.
What form 145 is
It's the "Communication of Data to the Payer," the document through which you inform your employer of your personal and family situation, so they can correctly calculate the income tax withholding percentage to apply to your payslip.
The information you need to provide
- Your family situation: single, married (and whether you file jointly or individually), widowed, separated, or divorced.
- The number of children and other dependent descendants, as well as ascendants if they depend on you financially.
- Any recognized degree of disability, your own or a dependent family member's, if applicable.
- Whether you pay spousal support to your ex-spouse or court-ordered child support to your children.
- Whether you have a mortgage on your primary residence from before 2013 that entitles you to the transitional deduction regime.
Why it's important to update it when your situation changes
The withholding your employer applies is based on the information you gave them at the time. If your family situation changes (a child is born, you get divorced, a family member's recognized disability degree changes) and you don't update form 145, your employer will keep applying a withholding calculated on outdated information, which may not match your actual situation.
What happens if you don't fill it out or fill it out incompletely
If you don't provide your personal and family information, the company will apply withholding based on the minimum data it has (usually just your salary), which usually results in a higher withholding than you'd actually owe given your full situation, although that excess ends up being adjusted in your annual tax return.
It's not a step that affects your final income tax bill
It's important to understand that form 145 doesn't determine how much income tax you pay overall for the year: it only determines the pace at which that tax is withheld from you throughout the year, as an advance payment month by month. Your actual final tax bill is always calculated and settled in your annual tax return, regardless of what you reported on form 145.
Estimate your correct withholding with your updated information
Our income tax calculator lets you estimate your withholding and effective rate by entering your updated personal and family situation, useful as a reference to check whether the information you gave your employer is correct.