Setting up payroll calculations

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The taxes to which calculations are subject vary by state or region. Verify the selections with your accountant, or if it is a benefit, the benefit plan administrator.

Caution! Verify that all your calculations are correct before running a trial-compute of your payroll. If you are unsure about the results, contact Customer Support or your business partner for assistance.

To set up payroll calculations

Open the 5-3-1 Payroll Calculations window.
In the data control box, enter the number you want to assign the new calculation.
In the Description box, enter a brief description for the calculation.
In the Tax Type list, select the type of earning, accrual, or deduction that you are setting up.
Depending on the tax type you selected, make additional selections as required for:
- Calculation Type. If you selected None as the Tax Type, you need to specify the type of earning, accrual, or deduction.
- Calculation Method. This list is available if you selected None or 19 - Employee RPP Contributions as the Tax Type. Click the method to use to compute the earning, accrual, or deduction,
- Based On. This list is available if you selected None as the Tax Type and 7 - %Other Calculation for the Calculation Method. Click the type of amount on which to base the payroll calculation.
- Default Rate. Enter the standard calculation rate.
  
  Important! When you use calculation method 17-Tables for federal or state income taxes, Sage 100 Contractor sets the rate. The rate does not appear in the payroll calculation or the employee record.
- Default Max. Enter the calculation maximum.
- Max Type. Click the type of maximum for the calculation.
  
  Note: If you plan to set maximum wages for workers' compensation codes for states other than Ohio, New York, and Nevada, you must select 4-Wages/Year.
Specify the accounts that will be affected by this payroll calculation:
1. In the Job Expense, Shop Expense, Overhead Expense, and Admin Expense boxes, enter the ledger account numbers to debit for each type of expense.
2. In the Credit Account box, enter the liability account number to credit.
3. In the Credit Subaccount box, enter the ledger subaccount number to credit.
  
  Note: If you want to use the employee number as the subsidiary account number, click Use employee# as subaccount.
Important! The Credit Account and Credit Subaccount are typically liability accounts. You must specify a Credit Account, but a Credit Subaccount is only necessary dependent upon your general ledger setup.
Under Subject to, verify the deductions to which the calculation is subject.
Under Tax Area:
1. If the calculation is for a specific state, enter the state abbreviation in the Tax State box.
2. If the calculation is for a specific local payroll tax district, click the district number in the Tax Locale list.
Under Reporting:
1. To include the calculation on a union report, select the union from the Union list.
2. To include the payroll calculation on certified payroll reports, select the type of benefit in the Benefit list.
3. To report the calculation total in box 11, 12, 13, or 14 on W-2 forms, enter the box number in the W-2 Box field.
4. To include a special code on the W-2, enter the code in the W-2 Code box.
Select the following checkboxes that apply to the payroll calculation:
- Use in Paygroup Benefits
- Display on Check
- Disposable Earnings
- Default to New Employees
Click File > Save.