(a) Every employer, as defined under the laws of the United States in effect July 1, 1982, or as subsequently may be defined, with respect to income tax collected at source, making payment of wages as defined under such laws to employees, shall deduct and withhold upon such wages, reduced by the optional standard deduction provided in subsection (b) of Section 40-18-15 and the federal income tax withheld, a tax equal to two percent of the first $500 or less, four percent of the next $2,500 or less, five percent of the excess over $3,000, by which the amount of such wages paid or to be paid in the calendar year by such employer to such employee, exceeds the amount of the exemptions granted to such employee under Section 40-18-19 as claimed on a certificate to be filed with the employer in such form and containing such information and detail as may be prescribed by the commissioner, pursuant to the provisions of Section 40-18-73; provided, however, that in determining the amount to be deducted and withheld under this subsection (a), an employer shall allow as a credit against such amount the job development fee described in Section 41-10-44.7(b).

(b) At the election of the employer with respect to such employee, the employer may deduct and withhold upon the wages paid to such employee a tax determined on the basis of tables to be prepared and furnished by the commissioner, which tax shall be substantially equivalent to the tax provided in subsection (a) of this section and which shall be in lieu of the tax required in such subsection.

(c) In determining the amount to be deducted and withheld under this section, the wages may, at the election of the employer, be computed to the nearest dollar.

(d) The department may, by regulations, authorize employers:

(1) To estimate the wages which will be paid to any employee in any quarter of the calendar year;

(2) To determine the amount to be deducted and withheld upon each payment of wages to such employee during such quarter as if the appropriate average of the wages so estimated constituted the actual wages paid; and

(3) To deduct and withhold upon any payment of wages to such employee during such quarter such amount as may be necessary to adjust the amount actually deducted and withheld upon the wages of such employee during such quarter to the amount that would be required to be deducted and withheld during such quarter if the payroll period of the employee was quarterly.

(e) The department is authorized to provide by regulation, under such conditions and to such extent as it deems proper, for withholding in addition to that otherwise required under this section and in cases in which the employer and the employee agree to such additional withholding. Such additional withholding shall, for all purposes, be considered the tax required to be deducted and withheld under this chapter.