About Progressive or Non-Progressive Calculation Wage Brackets

On the Earning/Deduction Codes setup window, and Brackets tab, select the Progressive Calculation check box if you want the wage brackets table to use progressive calculation for determining the total amount of a wage-table-based deduction or benefit. If you want the system to use non-progressive calculation (that is, focus only on the amounts entered for the range of wages applicable to the employee), clear the check box.

In both types of calculations, the rate varies according to the total salary during the pay period.

Progressive Calculation

In progressive calculation, one rate applies to salary up to a set threshold. A second applies to that portion of the salary above the threshold.

For example, suppose you set up a wage bracket table for a deduction as follows:

Image of the Payroll Earnings and Deductions screen

Assume the employee earns $2,500. If you select the Progressive Calculation check box, the payroll program will progressively calculate the deduction amount by using the values from each table entry (range) that applies to the $2,500 earning, and ultimately calculate a total deduction of $85, as follows:

Example of progressive calculation
Wage Brackets Table Entry

Amount

 “Plus Percent” Amount

(and how it is derived)

Total Amount
(A) (B) (C) (B) + (C)

0.00 to 1,000.00

5.00

1% x 1,000
(i.e. 1,000 – 0) = 10.00

15.00

1,000.01 to 2,000.00

10.00

2% x 1,000
(i.e. 2,000 – 1000) = 20.00

30.00

2,000.01 to 3,000.00

25.00

3% x 500
(i.e. 2,500 – 2000) = 15.00

40.00

Total deduction:

    

 

85.00

For details about the above table, click here:

  • Wage Brackets Table Entry column (A). Shows each wage brackets table range that applies to the $2,500 earnings. In this example, the $2,500 fall into the first 3 table ranges but not the 4th range.
  • Amount column (B). Shows the amount to be deducted for each range that the $2,500 falls into, as specified in the Amount column of the wage brackets table.
  • Plus Percent Amount column (C). Shows the extra amount to be deducted for each range, calculated by multiplying the Plus Percent field of the wage brackets table, by the portion of the $2,500 that falls into the range. (To determine the portion, the payroll program uses the Of Excess Over column of the wage brackets table.)
  • Total Amount column. Shows the total amount (columns B + C) to be deducted for each of the ranges.

Non-Progressive Calculation

In non-progressive calculation, the rate that will be applied depends on the salary level, with the percentage deduction determined by the total salary for a pay period.

For example, suppose you set up the same wage bracket table as shown earlier in the progressive calculation example. Assume the employee earns $2,500. If you choose non progressive calculation (that is, clear the Progressive Calculation check box), the payroll program searches the table to find the single range in which the $2,500 falls, and uses the values specified for that range to calculate a deduction of $40, as follows:

Example of non-progressive calculation

Wage Brackets Table Entry

Amount

 “Plus Percent” Amount

(and how it is derived)

Total Amount

(A)

(B)

(C)

(B) + (C)

2,000.01 to 3,000.00

25.00

3% x 500
(i.e. 2,500 – 2000) = 15.00

40.00

Total deduction:

    

 

40.00