Maintain Tax Rates


The purpose of this process is to ensure the rates used to calculate federal, state, and other withholding amounts are correct and added to the data base on a timely basis.

All taxrates are maintained in the 'Paytaxrate' file as separate records for each type of tax withholding. The following are the standard taxrate records provided:

  1. FEDERAL.S - single tax withholding table (annual). (see IRS Circular E (Annual Percentage Withholding Method).
  2. FEDERAL.M - married federal tax withholding table (annual).
  3. FEDERAL.X - federal extra tax information

  1. STATE.S*StateCode - single state tax withholding table (annual). (see State Income Tax Circular E (Annual Percentage Withholding Method).
  2. STATE.M*StateCode - married state tax withholding table (annual).
  3. STATE.X*StateCode - state extra tax information.

  1. FICA - social security withholding taxrate record for employee and employer.
  2. MCARE - medicare withholding taxrate record for employee and employer.
  3. FUTA*StateCode - Federal unemployment taxrate record.
  4. SUI*StateCode - state unemployment taxrate record. You can append a Client# to the end of the name of this record to get a customized rate table. This isn't necessary if you consolidate all payroll under one account. An example of the name would be: FUTA*WA (standard) or FUTA*WA_9900 (customized for a client).

  1. WCOMP*StateCode - worker's compensation taxrate record. As with SUI above, you can append a Client# to the end of the record's name to get a customized rate table for any client. An example of the name would be: WCOMP*WA (standard) or WCOMP*WA_9900 (customized for a client).

The State code referred to above is the US Postal service State Code, not the word StateCode! Additional records can be maintained for different states and for any clients.

Access TaxRate Maintenance Programs

Due to the serious damage caused in the payroll database if tax rates are changed or added incorrectly, access to the tax rate maintenance programs are limited to System Administrators. Refer to the on-line documentation to understand the file structure and programs to utilize to alter these tax records.

Maintain Federal and State Tax Rates

These rates should be maintained from the IRS and State Circular E (Employer's Tax Guide) received periodically. The Payroll System uses the "Annualized Wages Method" allowed by the IRS for figuring income tax withholding. This method multiplies wages earned by number of payroll periods in a calendar year, then compares the result to the annual "Percentage Method Table" to determine the annualized tax withholding amount. This tax amount is then divided by the number of payroll periods for each employee, resulting in the withholding amount for the payroll period. In order to maintain these rates, the operator should be familiar with the 'Update Processor'. This editor will provide the means to update the Federal Withholdings record.

Maintain Other Tax Rates

Other tax rates, maintained by a single tax-rate maintence program, are FICA, MCARE, FUTA, and SUI. FUTA, SUI, and WCOMP rates are associated with a state code (the postal state code such as NY or CA or FL). In addition, these rates may be further associated with a particular client on the Advantos Enterprise application. This allows clients to maintain separate tax rates for these other tax types. Naturally, FICA and MCARE rates are base rates just like income taxes. Workers Compensation rates are maintained by another tax-rate maintenance program. The on-line help will direct you through the proper code selection while using these programs.

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