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Field List

Setting Up a Local Tax

Setting Up a Custom Tax

Changing or Deleting a Custom Tax

About the Update Local Taxes Audit Report

About Federal and State Tax Codes

About Local/Other Tax Codes

The Local/Other Tax Codes setup window in Payroll Setup enables you to set up the taxes your company needs that are not supported by the system-installed tax tables. There are, however, many local taxes supported by the system tax tables and quarterly legislative updates that are available in the Local/Other Tax Codes setup window. An example of supported local taxes are the PA Act 32 Pennsylvania Political Subdivision Codes.

Many system-installed tax tables are added and maintained using the Federal and State Tax Codes setup window.

Use the Local/Other Tax Codes window to add the taxes you define yourself for local taxing entities such as counties and cities. When you set up a custom tax you indicate to the system exactly how to calculate the tax; the system receives no information about the tax from the installed tax tables.

You return to this setup window to update, add, and remove taxes yourself as necessary; for example, when taxing authorities notify you of changes.

The Local/Other Tax Codes setup window allows you to (click the links provided to learn more about each function or tab)

  • Basic Info. Used to add local payroll taxes and other custom taxes that are not supported by the Sage HRMS Payroll tax update service.
  • Employee. Used to set up guidelines for calculating the employee's tax deduction.
  • Employer. Used to set up calculations for the employer's contribution, if any.
  • Calc Base. Used to determine which earnings, deductions, and other taxes to include in calculation of the tax.
  • G/L Distribution. Used to set up default general ledger distribution accounts.
  • Brackets. Used to set up an annualized wage brackets table.
  • Optional Fields. Used to include additional information about the tax.
  • Modify and list tax information.
  • Automatically update the tax rates for Sage-supported local taxes.

The changes you make on the Local/Other Tax Codes setup window will become the default information for future (new) employees only — the tax information already assigned on existing employee records will not reflect the changes. To change the taxes already assigned to employee records, use the Update Taxes window. This window applies your modifications to all employees to whom the tax has been assigned. The system will use the information the next time you process timecards.

If you use Sage-supported local tax codes, the local tax rates can be updated automatically using the following steps:

  1. After the Product Update is complete, log in to Sage HRMS.
  2. Select Payroll Setup > Local/Other Tax Codes.
  3. Click the Install Repository button to update all of the local tax rates in the system.
  4. When the message displays "Install Repository completed. Do you want to continue updating company level local tax records with information from the local tax repository?":
    • Click Yes to automatically update the company rates for all local taxes.
    • Or, click No if you prefer to select each local tax individually and click the Update button for each one to apply the rate changes. This gives you the opportunity to validate rates before the change.

    If you click No, you will be required to manually update each employee level tax. This can be done for all employees at once by tax from Payroll > Update Taxes, or by individual employee from Employee Payroll > Taxes tab.

  5. If you click Yes, after the process completes a message displays "Updating company level local tax records completed. Do you want to continue updating employe local tax records from the local tax repository?".
    • Click Yes to automatically update the employee level rates for all local taxes.
    • Or, click No if you want to select each employee individually or use the Update Taxes task, and update each tax or employee individually.

Note: If any of your local taxes use the calculation method Percentage Of Base, you must continue to update each employee assigned that tax to ensure the rate at the employee level is correct. To do this, go to Payroll > Update Taxes, select the tax and make the appropriate updates.