General Ledger Payroll Tax Provisions

payroll's state payroll tax function is used to calculate your state payroll tax liability. Once configured, this liability can be picked up and exported to your accounting software as a provision.

Defining Your State Payroll Tax Liability

payroll can keep track of the payroll tax liability for each state. Liability for state payroll tax varies from state to state, but will generally include salaries, wages, allowances, commissions, bonuses and superannuation, among other things. In addition, different payroll tax rates and thresholds apply in each state. Refer to the Revenue Office of the required state for more details.

Within payroll, payroll tax is calculated as:

Total Wages liable for Payroll Tax - Monthly Threshold x Payroll Tax Rate = Payroll Tax Liability

Defining a Payroll Tax liability:

  1. Edit the state (via Company | Maintain company details | State Taxes) and complete the payroll tax definition (mandatory).
  2. Generally, employees who are apprentices or on the CDEP program are not liable for Payroll Tax. However, at your discretion, these employees may be included in Payroll Tax Liability. In the Employee Master File (via F3 Search) go to the Conditions of Employment tab and tick the option Inc. in Payroll Tax. If you are including them, ensure you also select a State for Payroll Tax.

    3. Apprentice and CDEP status are indicated on the Characteristics tab of the Employee Master File.

  3. Account Details is an optional step. Enter bank account details for the recipient of the payroll tax.
  4. On the Items tab select all pay items which are part of this state's liability for payroll tax. This is fully customisable and it is your own responsibility to ensure that your selections comply with current legislation. Check with the relevant state revenue office for more information.
  5. Run a state payroll tax report to calculate the payroll tax payable. Using the costing structure, the report collates all wages which have been selected on the items tab (previous step), for the payrun periods you have selected for the report. Two state payroll tax reports (one Detailed, one Summary) can be found in System Reports | Historical | Taxation.

Apply a General Ledger code for State Payroll Tax

  1. From the navigator go to Payroll | Payroll Framework.
  2. Double click the Pay Items node to open the All Pay Items window.
  3. From the list of All Pay Items, highlight Reserved Pay Items on the left.
  4. On the right double click the pay item ZPT - State Payroll Tax.
  5. In the pop-up window select the General Ledger tab. General Ledger codes for State Payroll Tax provisions are normally both debit and credit.
  6. Complete the information below as required:
Field Explanation
Post to General Ledger as... The system will default to Both (Expense/Liability).
GL Debit Code If you want to post the liability as a debit item, enter the code here. GL provisions will normally be posted as both a debit and a credit. If you are using a fixed general ledger code, enter the entire code. If you wish to use the GL structure, enter only the portion of the GL code which represents the pay item
Use GL Structure Select if you will be using the GL structure for this general ledger code. You will see the code reflected in the example of your current definition.
GL Credit Code If you want to post the liability as a credit item, enter the code here. GL provisions will normally be posted as both a debit and a credit. If you are using a fixed general ledger code, enter the entire code. If you wish to use the GL structure, enter only the portion of the GL code which represents the pay item
Use GL Structure Select if you will be using the GL structure for this general ledger code. You will see the code reflected in the example of your current definition
Define Structure Click this if you need to define or modify the general ledger account code structure. Note that this structure applies to the entire general ledger function, not just leave provisions.