About tax types

The tax type helps define the purpose of a calculation, and affects the other selections you need to make for a calculation. For example, in the Tax Area of 5-3-1 Payroll Calculations, you only have to provide the state abbreviation for the calculation and the ledger account numbers for posting. Sage 100 Contractor already contains the tax table data for each state.

The tax type also determines if a calculation is included in certain payroll or wage reports, such as the Federal Quarterly Payroll Report 941, or the W-2 form.

Depending on the type of calculation you want to set up, Sage 100 Contractor makes certain selections that you cannot edit, or makes suggestions that you can change. For example, when you select tax type:

• 5-Federal Income Tax, Sage 100 Contractor sets up the entire calculation, which you cannot change.
• 12-Workers' Compensation, Sage 100 Contractor selects only the calculation type and taxes to which the calculation is subject. You determine all the other factors for the calculation.
• 0-None, you can determine all the factors for the calculation. Sage 100 Contractor may make additional suggestions based on the calculation type or calculation method you select.

When setting up a new payroll calculation, check whether the Tax Type list already includes a type for the calculation you want to set up. If you do not find a specific type for the calculation, select 0-None.

For details on setting up tax calculations for specific states and municipalities, see Appendix D—Tax Setup Information.