I pay by the day and have a local income tax that only applies to the number of days that the employee worked in that jurisdiction. I set up the payroll item based on quantity since I pay by the day, but QB is not calculating it correctly.
Example: Employee is paid $150.00/day and worked 5 days that week with 1 day working in the jurisdiction that has the local tax so only $150.00 is subject to the 1.25% local tax.
I enter a quantity of 4 under the Earnings section to reflect 4 days that are not taxable in the taxable location. I then entered a quantity of 1 under the Other Payroll Items to reflect the 1 day worked in the local taxable area. The rate is not showing the percentage that I set up in the payroll item and only calculated the deduction to be -0.01 when it should be -1.88
I can't set the payroll item up as "Neither" because then it deducts the tax for then entire gross paycheck and I only need it to deduct from a portion of the gross and setting up the Payroll Item as hourly gives me the same results as setting it up as quantity.
That was the conclusion I arrived at but I was hoping maybe there was a way that it could be done without having to do it manually. I guess it's a good thing we only have 2 employees, otherwise this would be very time consuming.
Currently, the option to deduct the local tax based on your scenario is done by creating a payroll item and entering the amount manually. We appreciate sending feedback about it by clicking on the Help menu and selecting Send Feedback Online.