Tax Methods

The tax method tells the system how to calculate tax in the gross to net calculation. Tax methods can be changed by the user when posting a Manual Check and in the Time Posting programs (Post Time and Post Other Time Worked), and in Transaction Maintenance.

Canada

0 = regular
1 = average rate (formally marginal rate method)
2 = 50% of the marginal rate
3 = 20% federal tax (10% federal & 10% provincial if Quebec)
4 = no federal or provincial tax
5 = regular but assuming a frequency of 12
6 = regular on 70% of the amount
7 = marginal on 70% of the amount
8 = marginal rate ( legal method for bonuses)
9 = same as 0

United States

0 = regular
1 = regular, assuming frequency of 1
2 = regular, assuming frequency of 4
3 = regular, assuming frequency of 12
4 = no federal or state tax deducted
5 = regular, assuming frequency of 26
6 = Supplemental Wage Method, calculate a straight percentage of tax Federal. It will find this percentage in the Tax Authority table Parameter 10. It should be stored as an integer (ex 28% should be stored as 28 in the field not .28).
7 = Supplemental Wage Method Federal and State (only implemented in California to date). Will calculate a straight percentage of tax for both Federal and State.

Last Updated October 20, 2006