Within the Employee Payroll section of Avionté, taxes can be set up for an employee.
CHAPTERS
Create Taxes for a New Employee
Create Additional Taxes
Local Tax Overrides
Edit Taxes
View Tax History
Additional Configuration
Tax setup Options
Create Taxes for a New Employee
- Expand the Payroll option in the Employee sub-menu and select the Tax option. The Tax tab appears with three vertical tabs displayed to the right:
- Tax Setup (default)
- U.S. Federal Tax
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Tax History
- Click the Create Default Taxes button. The Employee’s tax information, based on the Employee's geocode, will be generated and appear in the grid.
Note: If the Employee record does not have a geocode, an error message will appear. Go to the Employee Detail tab and make sure the geocode is entered on the Address sub-tab for the employee.
- Review the filing status and exemptions that appear in the grid for each tax displayed, and enter any withholding the employee may have requested in the Add WH field. If any change is made, simply tab out of the edited field to save the change.
State Exceptions:
Nonresident Connecticut Withholding - Tax return a specified % of the original calculation
- To apply this configuration, access Employee > Payroll > Tax for an employee that has Connecticut withholding set up.
- Double click on the CT WH [State Withholding] item and a new screen appears - Additional Tax Details - CT. You will be prompted to enter the Employer (dropdown), Work Year (dropdown), and % of CT Services (decimal value). If the talent in question worked 80% of their job in Connecticut, you would enter "80.00".
- Click Save.
- Different amounts can be entered by year if you wish. Reopen the screen and select a different Work Year to apply a different value.
- When a new payroll batch is processed, Connecticut Withholding (CT WH) will be updated to reflect the values entered.
The system takes the amount calculated by Vertex and multiplies it by the CT WH values defined by the user. This enables Connecticut customers to be in compliance with the nonresident form. Workarounds attempting to manipulate the fixed percent field to get tax amounts are no longer necessary and are not recommended.
This service is only available for Connecticut at this time.
Create Additional Taxes
Once an employee has default taxes applied, any other taxes that need to be set up for that employee can be created. Additional taxes are those such as local municipality or school district taxes.
- Click the Create Additional Tax button. The Employee Tax Add window appears.
- Choose the appropriate tax from the Select Tax drop-down. To quickly find a particular tax, begin entering the first few characters of the tax name if known (for example, "stil" for Stillwater) and press Enter. A list will display with results that match the current entry.
- Depending upon the tax selected, you may need to select a Filing Status. If the drop-down is blank, you can skip this field, otherwise select a value from the list displayed.
- Enter the values in the Exemptions and Dependents fields.
- If needed, enter a value in the Additional Withholdings field.
- Once all the information is entered, click Finish. The newly-created tax information appears in the grid along with the default taxes created for the Employee.
Local Tax Overrides
The ability to override local taxes is linked to the Config Option AllowUserOverrideLocalTax.
Edit Taxes
Once an employee has taxes set up, you can edit their tax setup when the employee requests a change to their filing status, exemptions, or withholding.
- In the Employee section, search for and select the employee for which you are editing taxes.
- Expand the Payroll option in the Employee sub-menu and select the Tax option. The Tax tab appears with four vertical tabs displayed to the right:
- To change the filing status, exemptions, or withholdings for a tax, click on the cell in the tax row and directly update the value.
- If the Employee would like additional withholdings from his/her check, designate that in the Add WH column.
View Tax History
Additional Configuration
Admin Tools: System > Config Options
- Config Option: System > SystemSettings > ProcessDefaultTaxUsingWebService
- Config Option: User > User_UserSetting > AllowChangingTaxExempt
- Config Option: User > User_UserSetting > AllowDeleteEmployeeTaxDocument
- Config Option: User > User_UserSetting > AllowEditEmployeeTax
- Config Option: Supplier > EmployerSetting > DefaultEmployeeWizardTax
Other Tax Setup
- Config Option: Site > BranchSetting > DefaultFederalEmployerTaxPercentage
- System: Tax Authority
- Employer: Tax Setup
- Employer: Details
- Overview of Tax Exemption Settings for Employees
Tax setup Options
To display a column, open the field chooser to indicate which parameters to view.
Tax Setup Parameters
Classic Back Office Tax Setup Parameters | US Parameter Description | Canadian Parameter Description |
Exemption Amount |
This is an editable field. Only applicable for Colorado and Mississippi.
For Federal Withholding - this is a Pre-2020 configuration |
Exemption Amount is an editable field. This is the Total Claim Amount based on result of the Canadian TD1 Personal Tax Credit Return. By applying the Use Default Exemption Amount flag, the standard default Claim amount will be applied and not editable in the Exemption Amount field. Exempt Tax, Update Taxable wages - In most cases, when an employee is exempt from Income tax, they are to not have any taxes taken, but need to maintain reporting the taxable wages. Enter Exemption Amount = 999999 under Federal Withholding Tax. As a result of Vertex returning both Federal Tax and Provincial Tax as one value under Federal, this will stop the taxes for both Federal and Provincial calculations. Total Income Less Than Claim - When an employee has indicated on their TD1, no tax should be calculated but the taxable wages need to be maintained. Enter Exemption Amount = 9,999,999.99 under Federal Withholding Tax. More Than 1 Employer - If you have more than one employer or payer at the same time and you have already claimed personal tax credit amounts on another Form TD1 for the year, you cannot claim the tax credit on a second employer. Enter Exemption Amount = 00000 Non-Resident with less than 90% or less of taxable income in Canada enter Exemption Amount = 00000 for both Federal and applicable Provincial Withholdings [if over 90%, then enter applicable Total Claim Amounts] Exempt Tax, Update Taxable wages - In most cases, when an employee is exempt from Income tax, they are to not have any taxes taken, but need to maintain reporting the taxable wages. Enter Exemption Amount = 999999 under Federal Withholding Tax. As a result of Vertex returning both Federal Tax and Provincial Tax as one value under Federal, this will stop the taxes for both Federal and Provincial calculations. |
Use Default Exemption Amount |
Only displays if there is a Canada [CA] configuration under Admin Tools > Employer > Locality/Country > Country Code.
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This checkbox is used to determine if the employee's Exemption Amount is to remain at the authority Default. By selecting this checkbox, the amount will automatically default to the authority default value. While checked, the Exemption Amount field cannot be adjusted. By deselecting this checkbox, the Exemption Amount field can now be altered. |
Add WH |
This is an editable field. If Additional Withholding is to be deducted from each payment, additional tax to be deducted can be requested.
For Federal Withholding - this is a Pre-2020 configuration |
This is an editable field. If Additional Withholding is to be deducted from each payment, additional tax to be deducted can be requested. This tax parameter is applicable for Federal Withholding and Quebec Provincial Withholding. All other provinces, additional withholding requirements should be applied at the federal level. |
Is Tax Exempt |
This is an editable field. By selecting this checkbox, the employee is to be Exempt Tax AND Taxable Wages By indicating Is Tax Exempt, taxes are not calculated, and taxable wages are not reported. This is only available if the user has user permissions under Config Option: AllowShowIsTaxExempt For Federal Withholding - this is a Pre-2020 configuration |
This is an editable field. By selecting this checkbox, the employee is to be Exempt Tax AND Taxable Wages By indicating Is Tax Exempt on Federal Withholdings, both Federal and Provincial taxes are not calculated, and taxable wages are not reported. This is only available is the user has user permissions under Config Option: AllowShowIsTaxExempt |
Active |
This is an editable field. When Active is checked, indicates that the tax is currently active for the employee. If unchecked, is not an active tax and should not calculate any tax value when the employee is processed. This checkbox would commonly be used in the US to inactivate a local tax that was assigned in error by locator. Once that is done a user can “manually add” the correct local tax. |
This is an editable field. When Active is checked, indicates that the tax is currently active for the employee. If unchecked, is not an active tax and should not calculate any tax value when the employee is processed. |
Fixed % | This is an editable field. This option will return a tax value of Fix % x Gross Taxable Wages | This is an editable field. Overriding the compliant system calculated income tax is not recommended for Canadian Taxes. This option will return a tax value of Fix % x Gross Taxable Wages for Federal Withholding Tax and QUEBEC PWT. |
Fixed Amt | This is an editable field. This option will return a tax value of a Fix Amount. | This is an editable field. Overriding the compliant system calculated income tax is not recommended for Canadian Taxes. This option will return a federal income tax value of the Fix Amount. |
Exemptions |
This is an editable field. By configuring Exemptions = 999, this indicates that the tax is Exempt Tax, Update Taxable wages |
This is an editable field. This field is not applicable for Canadian Tax Types. Any value entered other than zero will be ignored. |
Dependents |
This is an editable field. This field would contain the total number of dependents determined on the applicable W4. For Federal Withholding - this is a Pre-2020 configuration |
This is an editable field. This field is not applicable for Canadian Tax Types. Any value entered other than zero will be ignored. |
Filing Status |
If applicable for the tax, this is an editable field. For Federal Withholding - this is a Pre-2020 configuration |
This is an editable field. This field is not applicable for Canadian Tax Types and should display N/A |
GeoCode | This is a display only field. The geocode is a computational identification of a location. This is used by Avionte and Vertex to determine specific tax withholdings for the employee and employer to ensure correct tax payments. | This is a display only field. The geocode is a computational identification of a location. This is used by Avionte and Vertex to determine specific tax withholdings for the employee and employer to ensure correct tax payments. |
VertexTaxId | This is a display only field. This ID is the Vertex defined ID used to identify specific tax types | This is a display only field. This ID is the Vertex defined ID used to identify specific tax types |
Tax Type | This is a display only field. This field is used to indicate the Authority type [Federal, FICA, City, SD, FUTA etc.] | This is a display only field. This field will indicate that is a Canadian Tax Type and not display the authority type. |
Tax Name | This is a display only field. This field will display the defaulted Tax Name | This is a display only field. This field will display the defaulted Tax Name |
TaxID | This is a display only field. This is a unique identifier for the Tax in the database [TaxMaster table]. It is just informative and most commonly used for troubleshooting. | This is a display only field. This is a unique identifier for the Tax in the database [TaxMaster table]. It is just informative and most commonly used for troubleshooting. |
EmployeeTaxID | This is a display only field. This is a unique identifier specific to a configuration row in the database [EmployeeTax table]. It is just informative and most commonly used for troubleshooting. | This is a display only field. This is a unique identifier specific to a configuration row in the database [EmployeeTax table]. It is just informative and most commonly used for troubleshooting. |
Date Entered | This is a display only field. This is a timestamp of when the tax row was created. It is just informative and most commonly used for troubleshooting. | This is a display only field. This is a timestamp of when the tax row was created. It is just informative and most commonly used for troubleshooting. |
Resident | This is a display only field. This is a US specific field to display if the tax is assign based on the Resident / Live address. | This is a display only field. Not applicable in Canada |
NonResident | This is a display only field. This is a US specific field to display if the tax is assign based on the Non-resident / Work address. | This is a display only field. Not applicable in Canada |
PSD Code | This is a display only field. Should display the PSD code for US Pennsylvania configurations only | This is a display only field. Not applicable in Canada |
IRS Lock-In |
This is an editable field for authorized users. An IRS Lock-In letter is sent to an employer to deduct federal income tax withholding at a higher rate for an employee. This is a US specific field to lock down the Federal Withholding Tax only. By selecting this checkbox, the system does not allow any manual updates to the W4 configurations by any unauthorized users. |
This is a display only field. Not applicable in Canada |
US Withholding Type | This drop down will indicate if the employee is: Citizen or Resident or a Nonresident Alien. This indication will impact the calculated result of the employees Income Taxes | This is a display only field. Not applicable in Canada |
NR_CERT |
This is used to indicate the presence of a reciprocal agreement between states. An employee that is a resident in one state but works in a different state that have entered into a reciprocal agreement for taxation. For example, if a talent lives in Kentucky but works in Indiana they will be exempt for Indiana Withholding in a reciprocity situation. The way this will automatically happen in onboarding is that when the talent selects their resident state of Kentucky from the guided flow, a trigger will be sent to the Back Office to check the Certificate of Non-Residency [NR_CERT].
Note: Note: The NR_CERT flag is ONLY ever checked on a WORK state.
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This is a display only field. Not applicable in Canada |
US Federal Tax Parameters
Not applicable for Canadian Employee configurations
Classic Back Office US Federal Tax Parameters | US Parameter Description |
Extra WH | This is an editable field. If Additional Withholding is to be deducted from each payment, additional tax to be deducted can be requested. |
Deductions |
This is an editable field. This is used if the employee expects to claim deductions other than the standard deduction and want to reduce their withholding. By configuring Deductions = 999999, this indicates that the tax is Exempt Tax, Update Taxable wages |
Other Income | This is an editable field. This is used if the employee wants tax withheld for other income expected in the year that will not have withholding otherwise, such as interest, dividends and retirement income. |
Qualifying Children | This is an editable field. This is used to define the number of qualifying children under the age of 17 multiplied by the applicable rate per qualified child. [Please see the current Federal W-4 form to find the applicable rate] |
Other Dependents | This is an editable field. This is used if the employee wants tax withheld for other income expected in the year that will not have withholding otherwise, such as interest, dividends and retirement income. |
Total Dependents | This is a display only field. This field displays the added values of Qualifying Children and Other Dependents to give a Total Dependent value use to pass to Vertex for the calculation of Income Tax. |
Filing Status | This is an editable field. This is used to indicate the employees anticipated filing status. If left blank, Single is the default value. |
Multiple Jobs | This checkbox is used if you (1) the employee has more than one job at the same time, or (2) the employee is married filing jointly and they and their spouse both work. |
Date Completed | This is a display only field. This is a timestamp of when the tax row was created. It is just informative and most commonly used for troubleshooting. |
First Work Date | This is a display only field and indicates the date the employee was hired. |
IRS Lock-In |
This is an editable field for authorized users. An IRS Lock-In letter is sent to an employer to deduct federal income tax withholding at a higher rate for an employee. This is a US specific field to lock down the Federal Withholding Tax only. By selecting this checkbox, the system does not allow any manual updates to the W4 configurations by any unauthorized users. |
US Withholding Type | This drop down will indicate if the employee is: Citizen or Resident or a Nonresident Alien. This indication will impact the calculated result of the employees Income Taxes |
Is Tax Exempt |
This is an editable field. By selecting this checkbox, the employee is to be Exempt Tax AND Taxable Wages By indicating Is Tax Exempt, taxes are not calculated, and taxable wages are not reported. This is only available if the user has user permissions under Config Option: AllowShowIsTaxExempt |
Canadian Tax Parameters
Use Field Chooser to activate.
Canadian Tax Requirement |
Classic Back Office Tax Parameter |
Description |
Prescribed Zone Deduction |
Prescribed Zone |
This is an annual deduction for living in a prescribed zone, or a housing deduction for a prescribed northern zone/intermediate zone. If the annual amount is on or prior to pay period 1, then enter the full calculated value. If the annual amount is not provided on or prior to pay period 1, a calculation should be made to adjust the credit value to be applied over a reduced number of pay periods by entering the value derived from the following formula: [(Value x Total pay periods in the year) / Pay periods remaining in the year)] The field becomes editable when the "Federal Withholding Tax" row is selected. Federal Withholding Tax amount updated after reprocessing payroll. |
Annual Deduction |
Annual Deduction |
An employee may apply to CRA or Revenu Quebec to be eligible for a Reduction at Source by applying to the agency. Once approved, the employee will receive a letter with their eligibility that they can submit to their employer. [The letter will define it as an F1 value] This value is an annual value, which is traditionally used for a salaried employee that has consistent payments for the year. It is not easily maintainable if the employee is paid sporadically throughout the year. (as Vertex takes the annual value received, which is then divided by the pay frequency in the calculation) If the employer receives the letter prior to pay period 1, they will enter the full value indicated in the letter. If the employer receives the letter mid-year, they will need to perform the calculation described in the letter [(Value x Total pay periods in the year) / Pay periods remaining in the year)] for the employee to get the full deduction in the remaining pay periods of the year. This value should only be applied to a singular year, as the employee is required to apply annually for Annual Deductions. |
Annual Credit |
Annual Credit |
An employee may apply to CRA or Revenu Quebec to be eligible for a Reduction at Source by applying to the agency. Once approved, the employee will receive a letter with their eligibility that they can submit to their employer. [The letter will define it as a K3 (Federal) or K3P (Provincial) value]. This value is an annual value, which is traditionally used for a salaried employee that has consistent payments for the year. It is not easily maintainable if the employee is paid sporadically throughout the year. (as Vertex takes the annual value received, which is then divided by the pay frequency in the calculation) If the employer receives the letter prior to pay period 1, they will enter the full value indicated in the letter. If the employer receives the letter mid-year, they will need to perform the calculation described in the letter [(Value x Total pay periods in the year) / Pay periods remaining in the year)] for the employee to get the full credit in the remaining pay periods of the year. This value should only be applied to a singular year, as the employee is required to apply annually for Annual Credits. |
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