Earnings/Deductions
You must define a calculation base for all earnings/deductions that use the following calculation methods:
- Amount Per Hour
- Hours Per Hour Worked
- Percentage Of Base
- Wage Bracket Table
The calculation base for an earning/deduction has four possible components. Depending upon the calculation method you associate with an earning/deduction, you may need to define one, two, three, or all of these components.
- If you set up an accrual, earning, deduction, or benefit that uses either the Amount Per Hour or Hours Per HourWorked calculation method, you must indicate which of the hours worked the earning/deduction is to be based on, under the Base Hours Include section of the Calculation Base tab of the Earning/Deduction Codes window.
The Finder displays a list of the hours-based earnings and accruals you can use in calculating the number of hours on which this earning/deduction is based. The earnings and accruals that display for selection have levels lower than the level of the accrual, earning, deduction, or benefit you are setting up.
The earnings included in the calculation base must be of the type Salary and Wages and must use the calculation method Flat, Fixed, Hourly Rate, Piece Rate Table, or Sales Commission Table. You can choose to include or exclude regular or overtime hours.
Select some or all of the hours-based earnings and accruals to build the calculation base used in calculating amounts for the earning/deduction you are setting up.
- If you set up an accrual, earning, or benefit that uses the Percentage Of Base or Wage Bracket Table calculation method, you must indicate the earnings and deductions that make up its calculation base, in the following sections of the Calculation Base tab of the Earning/Deduction Codes window:
- Base Earnings Include
- Base Deductions Include
The Finder displays a list of accruals, benefits, and earnings (with the exception of allocated tips) and a list of deductions, all of which have levels lower than the level of the earning/deduction being set up. You select some or all of the items in each list to build the base used in calculating amounts for the earning/deduction.
- If you set up a deduction that uses the Percentage Of Base or Wage Bracket Table calculation method, you must indicate the earnings, deductions, and, in the case of a net pay-based deduction such as a wage garnishment, taxes that make up the deduction's calculation base, in the following sections of the Calculation Base tab of the Earning/Deduction Codes window:
- Base Earnings Include
- Base Deductions Include
- Base Taxes Include
The Finder displays lists of earnings (including accruals and benefits), deductions, and, in some cases, taxes, all of which have levels lower than the level of the earning/deduction being set up. You select some or all of the items in each list to build the base used in calculating amounts for the earning/deduction.
- If you set up a two-sided deduction, which is a deduction that uses different employee and employer calculation methods, you may build the deduction's calculation base using a different scenario from the three enumerated above.
For instance, if you set up a pension plan deduction that uses an Amount Per Hour employee calculation method and a Percentage Of Base or Wage Bracket Table employer calculation method, you would indicate the base hours, the base earnings, base deductions, and base taxes included in the calculation of the deduction, in the following sections of the Calculation Base tab of the Earning/Deduction Codes window:
For instance, if you set up a 401(k) deduction that uses an Amount Per Hour employee calculation method and a Percentage Of Base or Wage Bracket Table employer calculation method, you would indicate base hours, base earnings, base deductions, and base taxes included in the calculation of the deduction, in the following sections of the Calculation Base tab of the Earning/Deduction Codes window:
- Base Hours Include
- Base Earnings Include
- Base Deductions Include
- Base Taxes Include
Taxes
You must define a calculation base for all income taxes.
Indicate the earnings and deductions that make up the calculation base for the tax, in the following sections of the Calculation Base tab of the Income Taxes window:
- Base Earnings Include
- Base Deductions Include
The Finder displays a list of accruals, benefits, and earnings and a list of deductions, all of which have levels lower than the level of the tax being set up. You select some or all of the items in each list to build the calculation base used in calculating amounts for the tax.
If a tax's calculation base includes accruals, benefits, earnings and deductions, the calculation base is equal to accruals plus benefits plus earnings minus deductions. If deductions exceed earnings, the Finder does not calculate an amount for the tax.
You must define a calculation base for all federal and state taxes and for custom taxes that use the following calculation methods:
- Flat
- Amount Per Hour
- Percentage Of Base
- Tax Bracket Table
The calculation base for a tax has three possible components. Depending upon the calculation method you associate with a tax, you may need to define one, two, or all of these components.
Flat or Amount Per Hour
If you set up a custom tax that uses the Flat or Amount Per Hour calculation method, you indicate the earnings that make up the taxable base for the tax, in the Base Earnings Include section of the Calculation Base tab.
The Finder displays a list of accruals, benefits, and earnings (with the exception of allocated tips) that have levels lower than the level of the tax being set up. You select some or all of the items in the list to build the base used in calculating amounts for the tax. For each earning you select, you indicate the withholding type (regular rate, supplemental withholding, or taxable, no withholding).
The list of earnings you select in setting up a Flat or Amount Per Hour method tax is not required for the calculation of the tax; instead it provides you with a means of tracking the taxable wage base for the tax.
Amount Per Hour
If you set up a custom tax that uses the Amount Per Hour calculation method, you must indicate the base earnings, and which of the hours worked the tax is to be based on, in the following sections of the Calculation Base tab:
- Base Hours Include
- Base Earnings Include
The Finder displays a list of the hours-based earnings and accruals you can use in calculating the number of hours on which this tax is based. The earnings and accruals that display for selection have levels lower than the level of the tax you are setting up.
The earnings included in the calculation base must be of the type Salary and Wages and must use the calculation method Flat, Fixed, Hourly Rate, Piece Rate Table, or Sales Table. You can choose to include or exclude regular or overtime hours.
You select some or all of the hours-based earnings to build the calculation base used in calculating amounts for the tax you are setting up.
Percentage Of Base or Tax Bracket Table
If you set up a custom tax that uses the Percentage Of Base or Tax Bracket Table calculation method, you must indicate the earnings and deductions that make up the calculation base for the tax, in the following sections of the Calculation Base tab:
- Base Earnings Include
- Base Deductions Include
The Finder displays a list of accruals, benefits, and earnings (with the exception of allocated tips) and a list of deductions, all of which have levels lower than the level of the earning/deduction being set up. You select some or all of the items in each list to build the calculation base used in calculating amounts for the tax. For each earning you select, you indicate the withholding type (regular rate, supplemental withholding, or taxable, no withholding).
If a tax's calculation base includes accruals, benefits, earnings and deductions, the calculation base is equal to accruals plus benefits plus earnings minus deductions. If deductions exceed earnings, the Finder does not calculate an amount for the tax.
Custom Tax Using Different Employee and Employer Calculation Methods
If you create a custom tax using different employee and employer calculation methods, you may build the tax's calculation base using a different scenario from the three described above. For instance, if you set up a tax that uses an Amount Per Hour employee calculation method and a Percentage Of Base or Tax Bracket Table employer calculation method, you would indicate not only the base earnings and base deductions included in the calculation of the tax, but the base hours as well, in the following sections of the Calculation Base tab:
- Base Hours Include
- Base Earnings Include
- Base Deductions Include