Problem
how to add **taxable** payroll benefits to Goldenseal
payroll software.
How to base a tax or benefit on other than the **gross wages**.
How to exclude a benefit or tax from deduction calculation
of other tax items.
**NOTE**-- These are just three different
ways to describe the same issue for our construction
payroll software!
Diagnosis
In each Tax
Item or Benefit
Item, the **Based On** and S**ubtract From** fields determine
the order of calculation.
**Based On** determines the base amount for this
item.
**Subtract From** determines when this item
is subtracted from gross wages (if ever), or added
if it's a wage or contribution to employee
That also determines the based on amounts for other benefits or Tax Items, that
might need to have the gross amount adjusted for their calculations.
Solution
Users will need to set up the Based On and Subtract From fields so it calculates correctly.
It may take some thought to figure out, but it only needs to be done once.
Check the steps below to understand
the logic.
Note that after entering hours,
it's easy to check to make sure it's using the correct
logic. Choose Write
Payroll, and double-click
on the **Deduction** column for an
employee. Check the** Base Wages** column- it should be the correct base
amount for
that item.
Here is how Goldenseal calculates payroll:
1. It starts with the gross wages. It uses that as the base amount for any Tax/Benefit Items
that have Gross Wages in the Based On field.
2. It subtracts any taxes/benefits that have Gross Wages in the Subtract
From field.
3. It next calculates any taxes that have Adjusted-Step one in Based On.
4. Then it subtracts any items that have Adjusted-Step One in Subtract From.
5. Repeat steps 3 and 4 for each of the remaining adjustments (we do
5 loops in all, which should be enough for even the most complicate
of payroll setups).
6. Finally it uses the result as the base amount for any taxes or benefits that use the 'net amount' for a based on
value.
Comments
Entered 2/14/01 by Casey. Updated
11/12/2010. |