Table of Contents

Calculation Methods

Eric Updated by Eric

This determines how the amount of tax will be entered on the Payroll Grid.

Percentage

  • The program will calculate the tax automatically based on the subject wages, Quarterly Rates (%), and Maximum Wages.
  • Rates for each quarter are required.
  • The rate specific to the date of the paycheck will be used to calculate the tax.
  • Once the maximum year-to-date subject wages has been reached, the tax is no longer applicable and the amount will be zero (or blank in the Payroll grid).
  • If the maximum wages is left blank, then there is no limit.
  • If the rate is left blank, then the tax will not be calculated.

Percentage (weekly wage cap)

  • The program will calculate the tax automatically based on the subject wages, Quarterly Rates (%), and Maximum Wages.
  • Rates for each quarter are required.
  • The rate specific to the date of the paycheck will be used to calculate the tax.
  • The Maximum Wages field is the weekly wage cap amount.
  • For Live Payroll users who have entered a payroll period for the employee, the cap amount is adjusted to reflect the payroll period.
    For example, for a check based on a weekly payroll period, the tax would be capped at the entered Quarterly Rate times the Maximum Wages (cap amount). However, for a check based on a biweekly payroll period, the tax would be capped at twice that amount. If the user doesn't enter a payroll period on the withholding tab for the employee, or the user has After-the-Fact Payroll instead of Live Payroll, then the tax on each check would be capped at the amount entered in the Maximum Wages field.
  • If the Maximum Wages field is left blank, then there is no limit.
  • If the rate is left blank, then the tax will not be calculated.

Amount Per Hour Worked

  • The program will calculate the tax automatically based on the hours worked for the income items checked as subject to the tax, as entered on the paycheck, and the Amount/Hour.
  • The amount per hour must be entered in dollars and cents. If the rate is left blank, then the tax will not be calculated.

Amount Per Total Hours

  • This calculation is similar to the Amount Per Hour Worked but also includes hours for all income items regardless of whether they are checked or not.

Fixed

  • The program will enter the same fixed Deduction Amount for the tax for each paycheck entered as long as at least one income item is entered that is subject to the tax.
  • If a Maximum Amount is entered, then once the total year-to-date amount of tax equals the maximum, it will no longer be calculated.

Variable

  • The program does not calculate the tax.
  • The user must enter the amount on each paycheck.

Rate Schedule

Users should not select this calculation method.
  • Only the program provided "Local Income Tax", "New York City", and "Yonkers" have the Rate Schedule as the calculation method.
  • If the user has the Live Payroll product, the program will calculate the tax using a withholding rate schedule. After-the-Fact Payroll users must enter the amount of tax manually in the grid.

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