Payroll - Tax Codes
FunctionThe Tax Codes maintenance task defines and maintains tax codes used in the calculation of employee taxes. Tax codes that apply to all employees (e.g., Federal Income Tax, Social Security Tax, etc.) may be designated for automatic assignment to new employees. The Display additional options... button provides additional features. => To access this task... Select Tax Codes from the Inquiry and Maintenance menu.
Tax Codes About the FieldsThis screen is divided into two sections. The upper section contains information defining the tax code. The lower section contains information determining how and where this tax amount will accumulate. To Enable Edits to the form select . In the Tax Year field...
In the Tax Code field...
In the Description field... The description is displayed in the Tax Code Maintenance option of the Employee Masterfile Maintenance task.
In the Report Code field...
From the Tax Type dropdown... Select one of the following to specify the method for calculating taxes when using this code.
In the Periods Taken field...
When entering more than one payroll period, enter the numbers one after another, with no spaces separating entries (e.g., 12345 to select all pay periods 1 through 5).
Enter one of the following to specify the basis used to calculate the amount of this tax.
In the Total Code field... This is the total to use in calculating taxes during the Payroll Calculation task.
In the Tax Rate field... When Units, Dollars, or Tax Table are selected in the Tax Type field. When the tax is based on a table, this rate is the supplemental rate applied to supplemental earnings.
In the Minimum Limit field... During automatic payroll calculation, the employee year-to-date earnings are compared to this limit. When the total earnings are less than the Min Limit entered, no tax will be assessed.
In the Maximum Limit field...
During automatic payroll calculation, the employee year-to-date earnings are compared to this limit. When the total earnings exceed the Max Limit entered, no further taxes are assessed. If the Max Limit or Tax Rate changes during the year, the month-to-date, quarterly and year-to-date will be affected. It is recommended that a new tax code be created in cases where the limit changed during the calendar year. Also, if the Max Limit has decreased during a calendar year, it is recommended that you check for negative amounts on the PRD/Payroll Detail Report and make the necessary adjustment to the PRD Payroll Entry task to prevent any errors from occurring, such as erroneous tax refunds. Special Tax checkbox... All Special Taxes not checked in this field are automatically assigned to each new employee when defined in the Employee Masterfile Maintenance task.
In the Jurisdiction Name field...
From the Tax Jurisdiction Type dropdown... Select one of the following to specify the method for calculating taxes when using this code.
In the Employer ID field... Use a maximum of 15 characters: up to 9 actual characters, with a maximum of 6 special characters. The Employer ID number is printed on state and federal W-2 forms and state quarterly report forms.
In the Calculation Sequence field... The calculation sequence is only used when calculating table type taxes.
These characters describe which categories to apply when calculating the tax and the sequence they are to be applied. When more than one calculation item is used, enter the characters one after another, with no spaces separating the entries.
In the State ID Code field...
If jurisdiction is Federal and basis for state taxes is reduced by the amount of the federal taxes, the state tax codes for the affected states should be entered in the State ID Code field in the Federal tax code masterfile record. State tax codes must be valid on the system. The calculation programs contain program logic geared to specific states. Please contact your dealer if new state tax methods are announced, as modifications may be necessary. In the Total To fields... For taxes, this option is only used in special situations such as accumulating a state tax basis that is a percentage of federal taxes. For these types of special situations, enter up to five total codes and operators (Refer to Operator field below).
When finished entering Tax Code Information...
If the Window is closed without saving the record, the module issues this confirmation prompt:
Selecting the [Display additional options] button presents the choice to print a listing of all Tax codes and the Table Update task. Selecting Code Listing creates a listing report:
Sample Tax Code Listing
See Output Options Selecting Table Update issues the following window:
Update Tax and Contribution Tables
The Tax Codes, Tax Tables, and Contribution Codes will be updated with the new data.
Note: Data Contained in the Upload File will Replace existing Data in those tables if encountered!
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