Utah taxpayers will soon see a 10 percent decrease in the amount of money withheld by the state from their paychecks as a result of the reduction in the income tax rate approved by the Legislature in July.

Lawmakers lowered the state income tax rates by 5 percent and restored one-third of the deduction for federal income taxes paid as part of a plan by Gov. Norm Bangerter to distribute a $110 million surplus.The changes were made retroactive to Jan. 1, 1988, so besides the extra money on paychecks now, taxpayers should also get a bigger income tax refund next year.

The state Tax Commission is mailing the new withholding schedules to all of the state's employers and encouraging them to start using it immediately. It must be in use by Jan. 1.

As an example of the savings under the new schedule, the Tax Commission said a family earning $30,000 annually with four withholding allowances will see about $14 more a month in take-home pay.

The new schedule also lowers the highest income tax rate to 7.35 percent from 7.75 percent.