Setting Up Tax Tables

Setting Up Tax Tables

Deduction Labels 

The Deduction Table is divided into 2 sections: Pre-Tax Deductions and Taxable Deductions. Within each category are three tax lines.   

If you have set up an employee to have either Pre-Tax or Taxable Deductions you can label that deductions.   

For example, if you have a 401K plan established, you can label the Pre-Tax deduction "401K plan" or Cash Advance can be labeled Pre-Tax 2 "advance".  

If it is a Taxable deduction you can label each Taxable deduction the same as above. 

To change Deduction Labels: 

Select Setup from the Payroll Menu . Then select Deduction Labels .  

At the Pre-Tax Deduction 1 enter the name you want to appear on the deduction label. 

All six deductions can be labeled. The system has been defaulted to Pre-Tax 1,2,3 and Taxable deduction 1,2,3. 

Overtime Rate: 

Depending on the overtime rate you use, you can set the overtime rate. If you pay your employee time and half, you would set the rate to 1.5. If it were double time you would enter 2.0. Also you can change the overtime rate from pay period to pay period. 

To set the Overtime Rate: 

Select Setup from Payroll Menu. Then select Overtime Rate.  

Enter the overtime rate based on the information stated above. 

Be sure if you are changing rates, you change it before the payroll is calculated. 

Tax Table Setup:

To enter the tax tables setup, select one of the Federal (Single or Married) or State (1 - 9) tax tables listed above.  

The information entered can be obtained from your Federal and State Employer Tax Withholding Guide.  

There are a total of 7 categories for the federal tax tables and 11 categories for the state tax tables. As you can see from the above example, not all the categories are currently used but the tax structure can change. The extra categories may be needed in the future. 

Other Federal and State Tax Rates: 

To setup the tax rates for the other federal and state taxes (FICA, Medicare, FUTA, etc.) select Setup/Miscellaneous from the Payroll menu .  

Enter the tax percentage and ceiling for each tax. The Federal and State governments at the beginning of each year supply these percentages and ceiling amounts.  

If you don't have the current information you can get them through either the government tax agencies or from your accountant. 

The tax percentages are entered as decimal numbers. This means that a FICA tax percentage of 6.25% would be entered as 0.0625.  

The State Exempt and Fed. Exempt fields are the State and Federal withholding exemption amounts.  

Refer to The IRS Publication 15;  Circular E Employer's Tax Guide for tax rates and Withholding information.