Setting up employee withholding

Eric Updated by Eric

Entry of withholding information for each employee allows the program to calculate the federal and state income tax withholding for the paycheck. The withholding information is entered on the Fed/St WH tab on the Edit Payee Info screen.

The Live Payroll Setup utility lets the user choose a pay period to use for all employees and automatically selects a state withholding rate file based on the taxing state. Users that previously computed employee paychecks using the Paycheck Withholding Calculator may be able to transfer the withholding information without reentering the data. Otherwise, additional withholding information must be entered separately for each employee.

Method 1: Use the Live Payroll Setup utility

See Live Payroll Setup: Withholding setup.

Method 2: Manual setup

  1. Click Fed/St WH.
  2. Choose a Pay period.
  3. Enter Form W-4 withholding information.
  4. For employees in states that levy income taxes:
    1. Choose the state from State (for State Income Tax)
    2. Select the state withholding status.
      Federal and state withholding statuses are defined differently.
    3. Enter any allowances in the appropriate state categories.
  5. To calculate local withholding, see Calculating local withholding tax.

How did we do?

Setting up a progressive or rate schedule tax

Setting up employers and employees in LivePayroll