US Tax

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Tax authority

This field identifies a government agency that is authorized to levy certain taxes. Depending on the jurisdiction of the agency, the level of the tax authority may be:

Federal
State (e.g. Washington)
County (e.g. King)
City (e.g. Seattle)
School district

Tax type
The type of tax to be levied by the authority, e.g. Withholding, Unemployment, Social Security.

Employer Identification number
The employer identification number assigned by the tax authority.

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Tax-Related Wage Types

In this section, you maintain tax-related wage types. This involves assigning processing classes and valuation bases to your wage types as well as creating statement wage types for storing the grossed-up value of wage types.

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Maintain tax-related processing classes

In this step you set the values for the following processing classes for all tax wage types. This allows you to control the way the wage types are processed by the payroll system.


IMG Path & Table: Maintain Tax-Related Processing Classes

Path: Payroll -> Payroll: USA -> Tax -> Tax-Related Wage Types -> Maintain tax-related processing classes
Table: V_512W_D

The processing classes involved in this step are

Processing class - Definition
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67 Work tax area override proration for supplemental wages
68 Payment type for tax calculation
69 Taxable earning or non-taxable earning
70 Work tax area override proration for salaried employees
71 Wage type tax classification
72 Employer / employee tax
84 Non-cash income type for tax calculation


Note: See Processing classes used in work tax area override processing for further information on processing classes 67 and 70.


Example: Taxes for wage type M002 (Monthly Salary) should be calculated using the regular method and as the employee's tax liability.
Values to enter:


Processing class 68 - Payment type for tax calculation: 1 Regular method
Processing class 69 - Taxable or non-taxable earnings: 1 Taxable earnings
Processing class 71 - Wage type tax classification: 0 Regular wages
Processing class 72 - Employer/employee tax: 1 Employee tax


Activities For each wage type relevant for taxes, set the values within processing classes 67, 68, 69, 70, 71, 72 and 84 as required.

Summary:

Processing
Class	Definiton
67	Work tax area override proration for supplemental wages
68	Payment type for tax calculation
69	Taxable earning or non-taxable earning
70	Work tax area override proration for salaried employees
71	Wage type tax classification
72	Employer / employee tax
84	Non-cash income type for tax calculation

Note: See Processing classes used in work tax area override processing for further information on processing classes 67 and 70.

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