Local payroll taxes and number of days worked

Stacy5 · ‎February 03, 2019

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.

Anonymous · ‎February 03, 2019

Hello, Stacy5.

You can create another payroll item to track the employee’s deduction for the work done in jurisdiction. Here’s how:

When creating a paycheck for the employee, go to Other Payroll Items section and select Add New.
For the payroll item type, select Deduction and enter the name.
Click Next and fill in the agency information for the deduction.
Click Next and choose Neither.
Select gross pay under Gross vs. net.
Leave the rate blank and click Finish.

Leaving the rate blank will allow you to enter the amount manually. This will need you to manually enter the 1.25% of 150.

Please let us know if you need anything else.

View solution in original post

Anonymous · ‎February 03, 2019

Hello, Stacy5.

You can create another payroll item to track the employee’s deduction for the work done in jurisdiction. Here’s how:

When creating a paycheck for the employee, go to Other Payroll Items section and select Add New.
For the payroll item type, select Deduction and enter the name.
Click Next and fill in the agency information for the deduction.
Click Next and choose Neither.
Select gross pay under Gross vs. net.
Leave the rate blank and click Finish.

Leaving the rate blank will allow you to enter the amount manually. This will need you to manually enter the 1.25% of 150.

Please let us know if you need anything else.

Stacy5 · ‎February 03, 2019

Thank you.

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.

Anonymous · ‎February 03, 2019

Hello Stacy5,

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.

Let us know if you need anything else.

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Local payroll taxes and number of days worked