Intro – Payroll Tax #

Payroll Taxes are calculated on the money employees earn, including wages, salaries, bonuses, and tips. In many cases, both the employer and the employee contribute a portion of the payroll taxes. The employer withholds the employee’s share from their paycheck and remits it along with the employer’s share to the appropriate government agencies.

• The system automates the preparation of essential payroll taxes, like federal income tax, Social Security, and Medicare.

Create a New Payroll Tax #

• Go to Payroll on the left sidebar, and select Payroll Tax
• Click Add New button.
• On the Add New benefit page, fill in the following fields
  • Tax Name: Enter a unique tax name.
  • Tax Agency: Select tax agency responsible for this tax.
  • Frequency: Select tax deposit frequency.
  • Wage base: Enter the maximum wages subject to this tax.
  • Employee Contribution:
    • Employee Rate %: Enter the percentage of an employee’s gross pay that the employer withholds from their paycheck each pay period.
    • Annual Maximum: Enter the annual limit for employee contributions if any.
  • Employer Contribution:
    • Employer Rate %: Enter the percentage of an employee’s gross pay used to calculate the employer’s contribution.
    • Annual Maximum: Enter the annual limit for employer contributions if any.
  • Employee Withholding Account: Tracks the amount the company withholds from employee paychecks.
  • Liability Account: Tracks the amount the company owe to a tax agency.
  • Expense Account: Track employer’s contribution as payroll expenses.

• Click Save