26 CFR § 31.3221-1 - Measure of employer tax.

---
identifier: "/us/cfr/t26/s31.3221-1"
source: "ecfr"
legal_status: "authoritative_unofficial"
title: "26 CFR § 31.3221-1 - Measure of employer tax."
title_number: 26
title_name: "Internal Revenue"
section_number: "31.3221-1"
section_name: "Measure of employer tax."
chapter_name: "INTERNAL REVENUE SERVICE, DEPARTMENT OF THE TREASURY"
subchapter_number: "C"
subchapter_name: "EMPLOYMENT TAXES AND COLLECTION OF INCOME TAX AT SOURCE"
part_number: "31"
part_name: "EMPLOYMENT TAXES AND COLLECTION OF INCOME TAX AT SOURCE"
positive_law: false
currency: "2026-04-05"
last_updated: "2026-04-05"
format_version: "1.1.0"
generator: "[email protected]"
authority: "26 U.S.C. 7805."
regulatory_source: "T.D. 6516, 25 FR 13032, Dec. 20, 1960; 25 FR 14021, Dec. 31, 1960, unless otherwise noted."
cfr_part: "31"
---


# 31.3221-1 Measure of employer tax.

(a) *General Rule*—The employer tax is measured by the amount of compensation paid by an employer to its employees. For provisions relating to compensation, see § 31.3231(e)-1. For provisions relating to the circumstances under which certain compensation is to be disregarded for purposes of determining the employer tax, see paragraphs (b) (1) and (2) of § 31.3231(e)-1.

(b) *Payments by two or more employers in excess of annual compensation limitation.* For rules relating to payments by two or more employers in excess of the annual compensation limitation, see § 31.3121(a)(1)-1.

(c) *Underpayments or overpayments.* Any underpayment or overpayment of employer tax resulting from the employer's inability to determine, at the time such tax is paid, the correct amount of compensation with respect to which the tax should be paid shall be corrected in accordance with the provisions of Subpart G of the regulations in this part relating to adjustments, credits, refunds, and abatements.

[T.D. 6516, 25 FR 13032, Dec. 20, 1960, as amended by T.D. 6541, 26 FR 555, Jan. 20, 1961; T.D. 8582, 59 FR 66190, Dec. 23, 1994]