The tables reflect a 9.0 percent reduction in the withholding rates previously in effect for 2013 to conform with the individual income tax rate reduction for 2013 and 2014.
So, if you withdraw $5,000 and then another $5,000 later in the year, the second withdrawal will be subject to the 20-per cent withholding rate federally.
Since a retiring allowance is considered to be a "lump-sum payment" for income tax purposes, the employer is required to deduct income tax in accordance with the lump-sum withholding rates.
Under the plan, contractors will be able to choose a withholding rate which suits them -- payments to around 130,000 contractors have withholding tax deducted from them each year.