Taxes must be withheld on all “wages,” which state law defines as any form of payment, cash, or anything else, for services performed by an employee. Bonuses, commissions, and sick pay are also subject to withholding.
Exemptions. Contributions to cafeteria plans, deferred compensation plans (such as 401(k) plans), and dependent care assistance are not subject to withholding. Withholding does not apply to agricultural labor paid less than $900 per month, domestic service, service not in the course of the employer's business if the pay is less than $200 per quarter, and religious duties of ministers and members of religious orders (OK Stat. Sec. 68-2385.1).
Employee leasing companies. Employee leasing companies must withhold taxes from their employees' wages (OK Stat. Sec. 40-600.7).
Designated distributions from pensions, annuities, and other deferred income payments, whether periodic or not, are taxable as wage payments for state tax purposes. If the recipient has not filed a withholding exemption certificate (Form W-4P), tax will be withheld on nonperiodic payments at a rate of 5 percent or on periodic payments as if the recipient were married and claiming three withholding allowances (OK Admin. Code Sec. 710:90-1-13).