FINAL - Employee Taxes Part 1

Employee taxes

Start

Customer Support Learning & Development Team

Michele Borntreger

Cheryl Vogel

Customer Support Trainer

Customer Support Trainer

Alethia Josey

Lee Moreau

Customer Support Learning & Development Manager

Senior Director of Customer Support & Learning

Learning Objectives

• Comprehend fundamental principles of employee taxes.
• Familiarize yourself with the Vertex tools for calculating taxes.
• Grasp the connection between Symmetry and PrismHR in the context of tax calculations.
• Recognize the correlation between specific benefits and their impact on taxes.
• Gain an understanding of the PrismHR components relevant to employee taxes.

4- Calculations

3- Tax Engines

2- Definitions

1- Overview

Agenda

6- States

8- PrismHR

7- Supplemental Pay

5- Benefits

01

Overview

02

Definitions

Definitions

Taxable Wages

Withholding

Payroll Taxes

W-4 Form

Form 1099

W-2 Form

FUTA

Form 941

SUI/SUTA

Reciprocity

Payroll Taxes

FIT

FICA - OASDI

FICA - MEDICARE

SIT

Geocode

A nine-digit numeric code that is used to accurately identify specific legal jurisdictions. Vertex assigns a geocode based on the address for:

• All US states and counties
• All US possessions, territories, and trusts
• All US cities that levy their own taxes
• All incorporated US Cities

Quiz Time

03

Tax engines

Vertex

• Payroll Tax Engine
• Federal, State, Local Calculations
• Geocodes

Monthly Vertex Calculation Guide

Geocode List

+ info

Symmetry

• Based on valid address (ER, Client, EE)
• Uses Latitude & Longitude to determine appropriate tax forms
• Must be enabled in the portal configuration
• Forms stored in Document Manager

04

Calculations

Understanding Vertex

Federal

States

+ info

+ info

Understanding Vertex

Tax Calculator Spreadsheet - Federal

+ info

FICA

If an employee made $150,000 in 2021, what is the amount the employee owed the IRS for FICA Taxes? The 2021 wage base = $142,800. The Social Security rate is 6.2% and the Medicare rate is 1.45%.

Social Security:

.062 =

Medicare :

.0145 =

Total FICA for Employee:

FICA (Answer)

If an employee made $150,000 in 2021, what is the amount the employee owed the IRS for FICA Taxes? The 2021 wage base = $142,800. The Social Security rate is 6.2% and the Medicare rate is 1.45%.

.062 = $8,853.60

Social Security: $142,800

Medicare: $150,000

.0145 = $2,175

Total FICA for Employee: $11,028.60

Quiz Time

05

Benefits

Pre-Tax Deductions

• These deductions can include contributions to a 401(k) or other retirement plan, health insurance premiums, and flexible spending accounts.

+ info

Post-Tax Deductions

• Post-tax deductions are deductions taken from the employee's paycheck after taxes are calculated.

+ info

06

States

To withhold or not to withhold

No State Income Tax

State Local Taxes

• Minnesota
• Missouri
• New Jersey
• New York
• Ohio
• Oregon
• Pennsylvania
• West Virginia

• Alabama
• Colorado
• Delaware
• Indiana
• Iowa
• Kansas
• Kentucky
• Maryland

Common States in Payroll

Pennsylvania

+ info

&

Ohio

+ info

Quiz Time

07

Prismhr

Employee Override

Employee Details - Tax

State Taxes

Federal Taxes

vs

Federal Tax Filing Panel Based on W-4 Form

State Tax Filing Panel Based on State Tax Form

+ info

Tax Calculation Override

Tax Calculation Override - Income Tax Override

Tax Calculation Override - Weeks In Pay Period

+ info

Payroll Control - Alternate Pay Period Special Batch

+ info

Payroll Control - Alternate Pay Period Manual Batch

+ info

Weeks In Pay Period/Alternate Pay Period

+ info

Permanent Tax Calculation Override

• Permanent
• Must be removed

+ info

Permanent Tax Calculation Override

geocode overrides

vs

vs

Client Worksite Location Employee

Employee Details

Client Details

Worksite Location

Changes the Vertex GeoCode the system should use for tax calculations instead of the default worksite location

All employees in the client

All employees attached to WSL

Employee Specific

+info

+ info

Default Geocode - Worksite Location

+ info

Override with Resident GeoCode

+ info

Override Work Geocode with Home Location GeoCode

Override Timesheet with Resident Geocode

+ info

Employee Geocode Override

• Calculates different municipality

Employee Address Geocode Override

+ info

Blocking Taxes

Blocking Taxes

Tax Calculation Override

Employee Details

Video 2

Suppressing TAxes

Global & Client Levels

vs

Client Level Suppresses on Individual Client only

Global Level Suppresses All Client

+ info

Suppress Tax Deduction

Suppress Local Tax by Employee

• Suppresses all local taxes
• Must select which local tax type
• If Thru Date is blank, suppression will always occur

Suppress Work State Tax

• Suppress state income tax where in the state the employee works
• If Thru Date is blank, suppression will always occur

Quiz Time

We are not tax professionals and cannot offer tax advice. Customers should seek a tax professional for recommendations.

- Genially

08

Supplemental Pay

What is supplemental pay?

Supplemental wages are additional dollars paid to employees in addition to regular wages

• Bonuses
• Commission
• Severance Pay
• Retro Pay

Percentage Method

A specific tax rate applied to supplemental income or payments that are separate from regular wages or salaries. Federal

• Rate = 22%, can change annually

State

• Not all states
• Rate varies

Example: $3,000 bonus $660 Fed taxes

Aggregate Method

• Normal Pay + Bonus
• Taxes based on W-4 information.

Calculation

09

Prismhr

Employee Override

Employee Details - Tax

State Taxes

Federal Taxes

vs

Federal Tax Filing Panel Based on W-4 Form

State Tax Filing Panel Based on State Tax Form

+ info

Tax Calculation Override

Tax Calculation Override - Income Tax Override

Tax Calculation Override - Weeks In Pay Period

+ info

Payroll Control - Alternate Pay Period Special Batch

+ info

Payroll Control - Alternate Pay Period Manual Batch

+ info

Weeks In Pay Period/Alternate Pay Period

+ info

Permanent Tax Calculation Override

• Permanent
• Must be removed
• No date range option

+ info

Permanent Tax Calculation Override

geocode overrides

vs

vs

Client Worksite Location Employee

Employee Details

Client Details

Worksite Location

Changes the Vertex GeoCode the system should use for tax calculations instead of the default worksite location

All employees in the client

All employees attached to WSL

Employee Specific

+info

+ info

Default Geocode - Worksite Location

+ info

Override with Resident GeoCode

+ info

Override Work Geocode with Home Location GeoCode

Override Timesheet with Resident Geocode

+ info

Employee Geocode Override

• Calculates different municipality

Employee Address Geocode Override

+ info

Blocking Taxes

Blocking Taxes

Tax Calculation Override

Employee Details

Video 2

Suppressing TAxes

Global & Client Levels

vs

Client Level Suppresses on Individual Client only

Global Level Suppresses All Client

+ info

Suppress Tax Deduction

Suppress Local Tax by Employee

• Suppresses all local taxes
• Must select which local tax type
• If Thru Date is blank, suppression will always occur

Suppress Work State Tax

• Suppress state income tax where in the state the employee works
• If Thru Date is blank, suppression will always occur

Quiz Time

Thank you!