Employee Tax Tab

Create and maintain an employee's list of payroll tax tables for tax calculation and/or withholding.

Example:

Usage:

This Tab must be completed for each employee if payroll is implemented on your system.

Payroll Tax Reciprocity
In order to implement Payroll Reciprocity, a line for every tax authority (requiring payroll tax withholding) where an employee might work should be included on the tax tab. The Always Withhold and Residence boxes must be blank for authorities where an employee works but does not live. Click Payroll Tax Reciprocity for an overview on this topic.

Important Fields:

Table Id:
Enter a valid Tax Table Id (or double-click to select from your firm's list of Tax Tables). Typically, you would include Federal (married or single), FICA (Medicare and social security), FUTA, SUTA, State and Local tax tables. For Field employees, the default State and Local tax tables are pulled from the Job record of the job being worked on.

Always Withhold?
This box should always be checked for most federal taxes; some exception exist for FICA MCAD.

FICA MCAD:
For Versions 8.2 - 9.0, the Medicare Additional (MCAD) for high wage earners should only be checked if the employee's wages have exceeded $200,000 for the current year. See Version 9.1 Medicare Additional Tax procedures on for details on how to handle this field in 9.1.

For state and local taxes that share a reciprocity agreement, this box should never be checked unless the Residence box is also checked (indicating that the employee is a resident of this taxing authority). This field is used in conjunction with payroll reciprocity and residual tax credits for work performed by residents of this authority in other authorities.

If the Residence box is checked, you may or may not check this box depending on the rules imposed by this authority: contact the appropriate authority to determine which rule applies.

1. Check Always Withhold if taxes should always be withheld for residents of this authority, regardless of where work is performed (double-dipping).

2. Check Always Withhold if a residual tax credit is allowed for wages earned in another state. The residual computation will be calculated during Compute Payroll. Note that the Residual Withholding and Residual Tax Credit % field must be completed in the Tax Authority of residence.

3. Do not check Always Withhold if this tax authority only requires that resident's tax be withheld for the work site authority.

Examples:

1. Let's assume this employee is a resident of Colorado (that requires only that the worksite state is taxed). Assuming that this employee might perform work in CO, NM and OK, their tax tab would include the following state authority entries:

Authority Always Withhold? Residence?

CO X

2. Now, let’s assume that the employee resides in New Jersey, and works in New Jersey, PA and NY. As the following table indicates, New Jersey requires that tax is always withheld for itself as well as the worksite state. However, New Jersey holds a reciprocal agreement with PA, and also provides a residual tax credit for work that New Jersey residents perform in states other than PA. In this case, the employee's tax tab would be filled out as follows:

Authority Always Withhold? Residence?

NJ X X

Now let’s look that at how state taxes would be computed where wages were earned as follows:

Wages Worksite Tax State Tax Rate W/H

$1000 PA NJ 3% $30.00

$1000 NJ NJ* 3% $30.00

$1000 NY NJ** 3% $10.00

NY** 4% $40.00

* NJ gets the tax because of its reciprocal agreement with PA.

** Both New Jersey and New York get tax - New York at its full rate of 4%. Since New Jersey provides a 50% tax credit for resident's wages earned in other states, the withholding for NY will be computed as follows:

NJ Withholding - (NY Withholding X Tax Credit %) =

$30 - ($40 X .50) = $10

Al Al Al Al Al (2 numeric x 5)
These fields pertain to the Allowance Categories 1-5 on the Federal and most State Tax Tables. For Federal taxes, enter the number of allowances the employee wishes to take in the first Al box. In most cases, State Tax allowances work the same way.

However, if this line is for a State Tax Table that implements different allowance categories, enter the number of allowances for the first state category in the first Al box, the number of allowances for the second state category in the second Al box, and so on.

Add'l Tax: (numeric format 000000.00)
The annual additional dollar amount to be withheld over the course of the year.

Add'l Allow: (numeric format 000000.00)
The annual additional Allowance amount to be used in tax calculations over the course of the year.

Add'l Credit: (numeric format 000000.00)
The annual additional Credit amount to be used in tax calculations over the course of the year.

GL Expense Account:
This field enables the use of multiple GL Accounts for employer based taxes. This field can only be set if the selected Tax Table has the Tax Employer? box checked. If this field is completed, the Compute PR function will use it to post to GL History instead of using the GL Expense account in the associated Tax Authority. If this field is blank, the system will continue to use the GL Expense Account in the Tax Authority.

Note: the sys-compute-payroll registry PRExpenseAccount option trumps the GL Expense Accounts on the Tax Authority and Employee Taxes tab.

Employee Viewer Taxes Tab

Purpose:

Example:

Usage:

Important Fields: