FREQUENTLY ASKED QUESTIONS (FAQ)

Payroll FAQ

Q: How do I setup State payroll tax as a percentage of Federal?

Q:How do I setup State payroll tax as a percentage of Federal?

In ONTOP, payroll taxes are calculated based on income not other taxes. Therefore, you must calculate the state taxes using a modification of the formula used for federal taxes.

The first step is to make the state tax table a duplicate of the federal tax table. Then you can reduce the percentages appropriately.

(For example, if the federal rate is 6.0% and the state is 10.0% of federal, set the state tax rate at 0.6% (6/100 * 10/100 = 0.6/100)).