Courtesy Withholding Definition
An optional service employers may choose to provide as a convenience to their employees. An employee’s local residence taxes are withheld and remitted by the employer on the employee’s behalf.
Employees living in one city and working in another may be required required to pay taxes in both cities. Instead of paying taxes individually, some employers offer the option to pay both taxes at once by withholding the due amount. With courtesy withholding, employees need not pay city taxes separately as the employer pays the amount due on behalf of their employees. Courtesy withholding is an optional benefit that differs from employer to employer.