Summary

The Tax Table Maintenance window is used to create and maintain tax tables. The tax table line items must be updated annually as tax codes are modified by the government agencies (IRS, states). The tax table is used to set the minimum income, standard deductions and tax credits for each tax code (Federal, State, Regional, Other). These tax codes are often referred to as super deductions. California customers will use this table to calculate the OASDI modification factor.

In order for a tax to apply to the wages on a payroll check, there must be a tax status (single, married, head of household) and super deduction (FED, STATE) set up on the employee record, the tax status and tax code must be set up on the tax table, and the pay code used to create the payroll check must affect the gross pay of the super deduction (affect federal, affect state). If any of these conditions is not met, the tax will not apply to the payroll check. For more information about taxes, see the document on Payroll Taxes.

Tax statuses are attached to employee records using the Taxes tab on the Employee Maintenance window (PR> Maintenance> Employee> Taxes tab). Enter a tax status for each tax code that applies to the employee record. For example, if an employee is single, enter an S in the federal tax field on the employee record. When payroll is generated on the employee, the tax table entry with code FED and status S will be applied to the employee. Also make sure the super deductions (FED, STATE, etc.) are attached to the employee record (PR> Maintenance> Employee> Deductions tab). For example, if the FED deduction is not attached to the employee record or is set up as suspended, federal taxes will not be deducted from the employee’s paycheck.

Once the employee records have been set up, use the Tax Table Maintenance window to create the tax table entries that will be used to calculate taxes. If you would like to create a new tax table line item with a modified withholding amount, enter the name of an existing tax code (EIC, FED, REGION, STATE) and create a new status (M, S, Head of Household, ST, X). The tax status of ST is used to tax employees at a supplemental tax rate.

Step by Step

1     View the current tax table.

• Open the Tax Table Selection window (PR> Maintenance> Tax Table).
• The Tax Tables window will display all of the tax tables created in the database.
• Right click on the data in the window and select Export grid contents to Excel if you would like to create a report of the tax table and the standard deductions attached to each tax code and status.
• Highlight a tax table and press ENTER or click the Modify icon to open the selected tax table.
• Highlight a tax table and press DELETE or click the Delete icon to delete the selected tax table.
• Highlight a tax table and click the Copy icon to create a copy of the selected tax table.
• Press INSERT or click the Create icon to create a new tax table. This will open the Tax Table Maintenance window.

2     Create or modify a tax table.

• The General section is used to specify the general tax table details.
  • The Code field should be FED, STATE, OTHER or a specific retirement code. The Code field is a super deduction and determines which drop-down menu on the Employee Maintenance window the status will display in. For example, if you are creating a state tax table entry for employees that are single, enter STATE in the Code field and enter S in the Status field. When you attach the status to the employee record using the Employee Maintenance window (PR> Maintenance> Employee> Taxes tab), the S status will display in the State Status field. If the code is not typed correctly or you enter an incorrect code, the tax table entry cannot be attached to the employee record.
    • Unlike other code fields in the Springbrook application, the tax table Code field does not have to be unique to each line item entry. This allows you to have more than one status for each tax code, but the combination of the code and status fields must be unique. For example, you cannot have two Single statuses attached to the FED code.
  • The Status field usually falls into the standard categories of single (S), married (M), head of household (H), supplemental tax (ST) or miscellaneous (X).
    • The X status is often used for different taxing purposes such as bonus checks.
    • There can be multiple tax status options tied to a tax code, but the Status field must be unique to each the tax code.
    • The Status code should be two alphanumeric characters.
    • The ST is used for a supplemental tax code.
      • A supplemental tax code will overwrite all other tax codes on employees when payroll is calculated using the Computer Checks process (PR> Computer Checks> Calculate if the Use Supplemental Tax Codes toggle).
      • The supplemental tax code applies a flat percentage amount to the calculated payroll.
      • You can create only one supplemental tax code.
  • The Description field is used to enter a description of the tax table line item. The description can be up to 30 alphanumeric characters long.
• The Revisions and Revision Details sections will display the details associated with each revision on the tax table.
  • Click the Create icon   drop-down and select New Revision to add a new revision line.
  • The Federal Exclusion, Minimum Income, Withholding Allowance, Tax Credit , Other Deduction, and Standard Deduction fields should be updated annually and completed based on the federal or state tax code.
    • The value in the Minimum Income field will be applied to the annualized federal gross on the paycheck.
    • The Standard Deduction field is the amount used in the 2020+ W-4 calculations IF the employee does not check the Multiple Jobs box in Step 2.
  • Check the Multiply standard deduction toggle if you would like the value in the Standard Deduction field to be multiplied by the number of dependents on the employee record.
  • Check Multiply tax credit toggle if you would like the value in the Tax Credit field to be multiplied by the number of dependents on the employee record (PR> Maintenance> Employee> Taxes> Federal Dependents, State Dependents, Regional Dependents, Other Dependents fields).
  • Check the Multiply other deduction toggle if you would like the value in the Other Deduction field to be multiplied by the number of dependents on the employee record.
  • Check the Round to nearest dollar toggle if you would like to round the tax values to the nearest dollar value.
    • When checked, tax values for the selected revision will round up to the next whole dollar from $0.50 and round down to the previous whole dollar from $0.49 when calculated.
• The Revision Tax Rates section
  • Click the Create icon drop-down and select New Rate to add a tax table rate line. This will create a line item in the Revision Tax Rates section.
    • The Level column is the income level that the tax table line will be applied to. For example, enter 0 if the tax should be applied on the first dollar.
    • The Percent column is the tax rate applied to the line item and it can be up to four decimal places.
    • The Minimum Tax column is used to enter the minimum tax amount on the line item. When taxes are calculated, the minimum amount will be added to the total tax amount due. For example, if a tax table line item has a rate of 10% and a minimum tax of $1500, the 10% rate will be applied to the check amount and then the minimum amount will be added.
      • (Wages * .10) + $1500 = Tax Amount Due
      • Tax Amount Due/Pay periods per year on employee record = tax deducted on check
      • For more information on how taxes are calculated, see the document on payroll taxes.
• Highlight a revision or revision tax rate and click the Delete icon to delete the selected line item.

3     Complete the Miscellaneous tab.

• The Miscellaneous tab allows you to build your own tables of data if there is information you want to track. This information is optional and user-defined.
• Miscellaneous field labels are maintained on the Miscellaneous Field Label Maintenance window (SS> Utilities> Miscellaneous Field Labels).
• Click the Save icon when the tax table revision is complete.