<P> Nearly all systems permit residents a credit for income taxes paid to other jurisdictions of the same sort . Thus, a credit is allowed at the national level for income taxes paid to other countries . Many income tax systems permit other credits of various sorts, and such credits are often unique to the jurisdiction . </P> <P> Some jurisdictions, particularly the United States and many of its states and Switzerland, impose the higher of regular income tax or an alternative tax . Switzerland and U.S. states generally impose such tax only on corporations and base it on capital or a similar measure . </P> <P> Income tax is generally collected in one of two ways: through withholding of tax at source and / or through payments directly by taxpayers . Nearly all jurisdictions require those paying employees or nonresidents to withhold income tax from such payments . The amount to be withheld is a fixed percentage where the tax itself is at a fixed rate . Alternatively, the amount to be withheld may be determined by the tax administration of the country or by the payer using formulas provided by the tax administration . Payees are generally required to provide to the payer or the government the information needed to make the determinations . Withholding for employees is often referred to as "pay as you earn" (PAYE) or "pay as you go ." </P> <P> Nearly all systems require those whose proper tax is not fully settled through withholding to self assess tax and make payments prior to or with final determination of the tax . Self - assessment means the taxpayer must make a computation of tax and submit it to the government . </P>

The amount of income received by households prior to the payment of personal income taxes is called