Payroll Other Taxes

To access this form, go to Payroll>System Setup>Taxes>Other Taxes

Use this form to set up tax codes for the localities in which your employees are subject to tax, as well as most State Disability Insurance (SDI), and Temporary Disability Insurance (TDI) withholding and expensing formulas. In each section, specify how to calculate and account for these other taxes. Additionally, you can specify how to distribute the Employer tax (if any).

Make your way down the form, filling in all required fields.

Click a dropdown link below to learn more about the fields in each section of the form.

Other Tax Code Details

Tax Code	Enter a new tax code. Make the first few characters of the code unique so that the paycheck displays a useful identifier. We recommend limiting your entry to strictly alphabetic characters (A through Z) or numeric characters (0 through 9), and avoiding the use of symbols.
Status	Specify the status of the code. The status can be changed at any time. Below are valid status entries and their descriptions: Active (A) - An active status allows payroll processing with this code. Inactive (I) - Set a code to inactive when you do not want to use it regularly, but you may need to use it at some point. A warning message appears when you attempt to use an inactive code. The warning message is for notification only; you can still use the code in payroll processing. Discontinued (D) - Designate a code as discontinued when you no longer use it. The system does not allow payroll to be processed using a code with a discontinued status.
Title	Enter the description of the tax code.
Aatrix ® Tax Type	Select the appropriate Aatrix Tax Type for local or other tax types. Click the "Aatrix Tax Type" link below the field to search for a tax type. This is for Aatrix reporting purposes only and displays on the Other Taxes List Report.
Employer Local Tax ID	Enter the employer tax ID number for the tax code.

Applicable Taxes

Select whether the tax is paid by the Employee and/or Employer for the designated code.

Note that Employee is not an employer expense and therefore is not distributed as an expense.

If the "Employee Applicable Taxes" checkbox is selected, the Employee Taxes section becomes available; likewise, if "Employer Applicable Taxes" is selected, that section will become available.

Other Tax Employee

Use this section to specify how the system should account for the employee withholding tax. Select the Withholding Tax's calculation basis, the General Ledger Liability Account, and the calculation type. The Employee Rate Table displays columns based on the Calculation Type selected. Enter exemptions/deductions, if applicable.

Calculation Basis	Select a calculation basis to determine the subject wages to be used for calculating the other tax. Taxable Earnings: Earnings, benefits, and deductions used in the employee's timesheet that are flagged as subject to other withholding tax. Federal Withholding: Earnings, benefits, and deductions used in the employee's timesheet that are flagged as subject to both federal and other withholding tax. State Withholding: Earnings, benefits, and deductions used in the employee's timesheet that are flagged as subject to both state and other withholding tax.
Employee Liability Account	Enter the General Ledger Liability Account for withholding tax. The Liability Account must be an existing Active or Inactive General Ledger account that is not a subledger-type account.
Employee Calculation Type	Select the calculation type and use the employee rate table to set up the tax calculation. The following describes each calculation type: Annual Base Tax: Taxes are calculated according to a fixed amount. Annual Tiered Tax: Tax rates change based on income levels, multiple lines are needed. Annual Tiered Tax with Cap Option: Tax rates change based on income levels, multiple lines are needed. Base Tax per Period with Minimum Wage Threshold: Taxes are calculated according to a fixed amount after a minimum wage amount is met for the pay period. Percent of Annual Wages with Cap Option: Taxes are calculated on a year-to-date or current pay period basis according to a flat percentage. Percent of Wages with Pay Cycle Cap Option: Taxes are calculated on a pay period basis according to a flat percentage.
Employee Rate Table	The amounts and percentages entered in this table are used in the calculation of the withholding tax. You must complete at least one line of this table if the Employee Applicable Taxes check box was selected on the Tax Code tab. The available fields change depending on the Calculation Type selected. For an in-depth description of each calculation type, with examples, see Payroll Calculating Other Withholding Taxes.

Other Tax Employer

Use this tab to specify how to account for and calculate employer paid taxes, if any.

Expense Account	Enter the General Ledger expense account for the Employer's Paid Tax. The Expense Account must be existing, Active or Inactive General Ledger account that is not a subledger-type account.
Liability Account	Enter the General Ledger liability account for the Employer's Paid Tax. The Liability Account must be an existing, Active or Inactive General Ledger account that is not a subledger-type account.
Employer Calculation Type	Select the calculation type and use the employer rate table to set up the tax calculation. The following describes each calculation type: Base Tax per Period with Minimum Wage Threshold: Taxes are calculated according to a fixed amount after a minimum wage amount is met for the pay period. Fixed Amount: Taxes require a fixed amount deduction per pay period. Percent of Wages with Cap Option: Taxes are calculated on a year-to-date or current pay period basis according to a percentage.
Employee Rate Table	The amounts and percentages entered in this table are used in the calculation of the withholding tax. You must complete at least one line of this table if the Employer Applicable Taxes check box was selected on the Tax Code tab. The available fields change depending on the Calculation Type selected. For an in-depth description of each calculation type, with examples, see Payroll Calculating Other Withholding Taxes.

Employer-Paid Other Tax Expense Distribution

Use this section to specify how to distribute the employer's portion of the other tax expense.

Follow Earnings on Timesheet: The tax is distributed to the same Account Codes (except General Ledger) as the employee's earnings on their timesheet. If more than one distribution code is used to distribute the employee's earnings on the timesheet, the taxes are distributed based upon a weighted average of the distributed earnings.

Follow Earnings Used to Calculate the Tax: Limits the distribution used to calculate the tax to the earning codes specified. The tax is distributed to the same Account Codes (except General Ledger) as the employee's earnings. If more than one distribution code is used to distribute the employee's earnings, the taxes are distributed based upon a weighted average of the distributed earnings.

Use Distribution Code: Use this distribution method if there are one or more funding sources to which you do not distribute federal taxes.

Note: If there are one or more funding sources to which you do not distribute federal taxes (because you may have a negotiated rate or federal taxes are simply disallowed), you can choose the Use Distribution Code distribution method. For this method, specify the exact Distribution Code to distribute the federal taxes, which may be entirely or partially distributed to overhead. If a Distribution Code is specified in this section, it should be an existing Distribution Code.

Note: Many grants and contracts allow federal taxes to be charged directly to the funding source. In this case, choose Follow Earnings on Timesheet or Follow Earnings Used to Calculate the Tax. The employer's portion of the federal taxes is distributed to the same Account Codes (Fund and any other account segments except General Ledger) as the employee's earnings. In other words, the Distribution Codes used to distribute the employee's earnings are also used to distribute the federal tax. If more than one Distribution Code is used to distribute the employee's earnings, the federal taxes are distributed based upon a weighted average of the distributed earnings.

Note: The selected distribution method only applies to employer-paid taxes, such as FUTA, Social Security, and Medicare.

Note: The calculation of federal tax FIT and MC are provided by the system; the official values for FUTA, FICA, and SS are also provided but can be manually maintained if mid-year adjustments occur before a normal software update. The earning, benefit, and deduction amounts that are flagged as subject to the specified federal tax are used in the calculation of the tax.

When you are finished making your changes, click .

More information on calculating other taxes, and examples with calculation methods

See Other Taxes Rate Tables for examples on calculation methods available in "Other Taxes", or visit Payroll Calculating Other Withholding Taxes for a breakdown on how withholding taxes are calculated using the information in the system.

For information on calculating taxes for Mississippi, Marianas Protectorate, Massachusetts, Republic of Marshall Islands, and Republic of Palau, see Miscellaneous State Taxes.