- Withholding elections are located in the Employee/Tax tab.
- Employee taxes are calculated based on home and work addresses.
- Withholding and Unemployment states are selected separately.
Add Employee Tax
- Menu: Payroll>Employee>Add Employee/Tax
- The home address is automatically populated.
- Location codes are used to determine possible taxes to be taken.
- Federal 'Ignore filing status/exemption' will take no federal income tax or a specified dollar amount entered.
- If 'FICA Exempt' is checked, no Social Security or Medicare taxes will be taken or reported.
- If 'FUTA Exempt' is checked, no Federal Unemployment taxes will be taken or reported.
- Enter the federal withholding elections. Additional amounts can be withheld along with the elections.
- Select the location of the work address from the drop-down menu.
- Employees are set to work in only one state for withholding and unemployment taxes per payroll run, though those states can differ. For example, they can have income tax withholding in California and unemployment tax in Oregon.
- If the employee is exempt from State Unemployment tax, check the box.
- Select which address the state income tax should be based on (Home or Work).
- State 'Ignore filing status/exemption' will take no state income tax or a specified dollar amount entered.
- Enter the state withholding elections. Additional amounts can be withheld along with the elections.
- Click the 'Save' button.