Tax Tables

Use Tax Tables to calculate payroll tax items that use a step table with different rates for different wage amounts.

HINT-- The Goldenseal payroll software already includes Tax Tables for all US states and Canadian provinces. You can easily import them into your company file, so you probably won't ever have to create your own tax tables.

WEBSITE INFO LINKS
Payroll Software | Payroll Accounting Software

When to Use Tax Tables

Most state and federal withholding taxes require Tax Tables for correct computation. You probably won't have to create any new tables, though, since Goldenseal already includes them for all states and provinces.

Click here for specific details about each US State and Canadian Province.

Entering Tax Tables

To enter a Tax Table, follow these steps:

Choose Payroll Setup from the Costs menu, then choose Tax Tables from the submenu.
Click the New button, or click on an existing item and click the Edit button.
Enter details for the tax table.

Data Fields

Enter the following information for each Tax Table:
Name-- Type in a brief name for this tax table. This is the text that will appear in clairvoyant fields.
Description-- Type in any comments you'd like to make about this item.
Adjustment fields-- Use the Adjustment fields to handle allowances, exemptions and other adjustments that are applied before the table computations.
Minimum Deduction-- If you turn on this checkbox, the adjustment will be equal to at least the minimum amount you enter here.
Maximum Deduction-- If you turn on this checkbox, the adjustment will be no more than the maximum amount you enter here .
Adjust After Table is Computed-- Turn on the checkbox for each adjustment to apply it after the table is computed, not before.
Calculation Method-- Use the Calculation method field to determine how the table is calculated.
Base Period-- Use the Base Period field to enter the length of payroll period that is used for the values in this tax table.
Allow Negative Results?-- If the calculated value may be negative, check this box. If it is not checked, negative values will be changed to zero.
HINT-- Nearly all tax tables should have this checkbox turned off.
Tax Table-- Enter ranges, amounts and percentages into the Tax Step Table.

Adjustment Fields

The adjustment fields are necessary for proper computation of many state and federal taxes. They can be used to adjust either the base wage before the table is used, or the tax amount after the table is used.

Several types of adjustments are available:

Dollars-- Enter a dollar value in the field. This dollar value is subtracted from wages.
Percent-- Enter a percentage in the field. This percentage is calculated from the wages, either before or after they are processed by the table. Then this percentage is subtracted from wages.
Nothing-- Use this choice if no adjustment is needed.
Low Income Cutoff-- If the incoming amount is less than the cutoff, it is reduced to zero.
Federal, State, Local, or Other Dollar Amount-- Wages are adjusted by the amount in the Federal, State, Local, or Other Withholding $ field in the Employee Account. Generally the dollar amount is subtracted from wages.
Per Federal, State, Local, or Other Allowance-- The dollar amount in the dollar field is multiplied by the number in the Federal, State, Local, or Other Allowance field in the Employee Account. Generally the result is subtracted from wages.
Per State Allowances-- These special case options are designed to handle a few states that use different adjustments for different numbers of allowances/exemptions.
If State Allowances-- These special case options are designed to handle a few states that use different adjustments for different numbers of allowances/exemptions.

Calculation Method

Enter the calculation method for the tax table:

Standard Step Table-- The tax will be computed using the method used by IRS and nearly all states, where Tax = Dollars + Percent * (Wages - From Amount).
Subtracted Step Table-- The tax will be computed by subtracting the dollar amount, where Tax = Percent * Wages - Dollars. This method is currently used only in North Carolina.
Table As Credit-- The results of the table are subtracted from the base amount.
Percent Tax Only-- If you choose this option as a calculation method, the tax will be equal to the wage multiplied by the Percent column value. The Dollars column is ignored.
Dollar Tax Only-- If you choose this option as a calculation method, the tax will be equal to the value in the Dollars column. The Percent column is ignored.
Percentage Only-- If you choose this option, the percentage in the Percent column is used. This option is used only for the credit table in the Connecticut state taxes. For other taxes, use the Percent Tax Only choice.
Canada Credit Table-- The tax uses special calculations for the Canadian credit tables.
Canada Province Table-- The tax uses special calculations for the Canadian provincial tax tables.
Canada Surtax Table-- The tax uses special calculations for the Canadian surtax tables.
Canada Wage Table-- The tax will be computed using the Canadian method, where Tax = (Wages * Percent) -- Dollars.

Base Periods

Choose the time period over which this tax table is calculated. Use the time period from the tax calculation booklet. Nearly all taxes are computed on a daily, weekly or yearly period.

HINT-- The Base Period for tax calculations does not need to be the same as the payroll period, which is set in the Wage Schedule.

If this tax table is applied to a tax item or pay period that has a different interval, Goldenseal will make an adjustment.

The Year time period uses a 365 day year, which converts to slightly more than 52 weekly pay periods.

If you'd like an annual Tax Table to convert evenly to a weekly pay period, use either the 52 Weeks or 53 Weeks option, depending on the number of pay periods in the current year.

Tax Step Table

Enter the following values into each column of the step table:

Up To-- Enter the next 'step' amount. It must be larger than the row above it.
Dollars-- Enter the dollar amount for this step range.
Percent-- Enter the percentage amount for this step range.

To add a new row to the step table, click in the bottom row and hit the Return key.

For most Tax Tables, Goldenseal computes the tax like this:

It applies any Adjustment values to the incoming wage amount.
Goldenseal checks the From and Up To amounts in the table, and finds the range where the current amount fits.
Goldenseal subtracts the From amount from the wage, and multiplies the remainder by the Percent value.
Goldenseal adds the Dollar amount. That is the total tax amount.
If any of the Adjustment values have the checkbox turned on for Adjust After Table Is Computed, those adjustments are applied.

Using Tax Tables

To use a Tax Table, enter it into a Tax Item.

Updating Tax Tables

To update your own tax tables, follow these steps:

Choose Payroll Setup from the Costs menu, then choose Tax Tables from the submenu.
Click on the tax that has changed, then click the Edit button.
Check the tax booklet. If the amount of an exemption has changed, change the numbers on the left side of the window.
Check the withholding step table in the booklet-- it's usually called the Formula method.
If the allowance or exemption amounts have changed, enter them into the fields on the left side of the window.
If the cutoff amounts, base amounts or percentages have changed, enter new values into the table on the right side of the window.

Annual tax updates are also available from Turtle Creek Software-- check our website at www.turtlesoft.com for details.