Setting Up a Custom Tax

The Custom Tax Codes setup process is used to add a tax that's not supplied by Sage HRMS Payroll tax tables, such as city or county taxes unique to your area and that are not supported with the quarterly legislative updates. 

After you add your custom tax, you can use it in your Sage HRMS Payroll system. For example, you can assign the tax to an employee or use the tax when setting up an earning/deduction.

You may want to consider importing taxes from a file as an alternative to adding taxes manually.

• Make sure you understand the impact the tax settings have on payroll processing.
• Using the Earning/Deduction Codes window, define the earnings/deductions used to calculate your employees’ pay.
• Determine the local or other custom taxes you need, and the types of information you need to track and report in each.
• Consider the levels of your taxes.
• Determine the G/L account numbers to which you want tax amounts to post.

If you are using cost center overrides, you may want to set up base distribution accounts at the tax level since you will be overriding one or more of the distribution account’s segments with employee-specific segments. (If you use cost center overrides, tax amounts are distributed to the cost centers in which the taxable wages were earned unless you set the Use Cost Center Overrides For These Accounts option to None on the Payroll G/L Integration setup window.) A base distribution account has a valid account segment but may use zeros or some other number for the segments that will be overridden on an employee-by-employee basis.

Be sure that the G/L segment codes and accounts, including any base accounts, to which tax totals will post have been added in General Ledger.

Print a listing of taxes you set up, to verify that they are correct and complete:

• On the File menu of the window, choose Print.

Or

• From the Payroll Setup Reports folder, choose Tax Profiles.