How do State Tax Calculations work?

Symix State Tax Calculations

Primarily, three setup screens within SYMIX determine how State Withholding Taxes will be calculated. They are the Tax Code (Basis), Tax Code (Tax Tables), and the Employee - Rates and Taxes, all pictured below. The calculation of the State Withholding Tax will be described based upon the labels of the fields on these three screens.

The fields on these screens referred to within this document are highlighted and the screen on which they appear is identified within parenthesis.

If the Employee has not been assigned a State W/H Tax Code (Employee - Rates and Taxes), no State Taxes are calculated. In addition, no State Wages are calculated or accumulated for the employee.

If the State Tax Calculation Basis (Tax Code - Basis) is (D)irectly on Earnings and the Employee's State W/H # of Exemptions (Employee - Rates and Taxes) is NOT 99, the State Taxes are calculated as follows:

CALCULATE THE ANNUAL STATE GROSS WAGES
1. Annualize the State Gross Wages by Multiplying the Gross State Wages (Taxes - Payroll Processing) for the period by the Periods Per Year (Payroll Parameters - General) of the employee's pay frequency.

REDUCE THE ANNUAL STATE GROSS WAGES
2. Restrict the Annual State Wages to the Gross Wages Cut Off Amt (Tax Codes - Basis).
3. The Annual State Wages are multiplied by the Base Gross % (Tax Codes - Basis).
4. The Annual State Wages are multiplied by the Std Gross Pay Adj % (Tax Codes - Basis). If this amount is less than Min Std Adjustment (Tax Codes - Basis), the Annual State Wages will be reduced by the Min Std  Adjustment. If the amount is more that the Max Std Adjustment (Tax Codes - Basis) the Annual State Wages will be reduced by the Max Std Adjustment. If the amount is between the Min Std Adjustment and Max Std Adjustment, the Annual State Wages are reduced by the amount calculated.
5. If the State's Adjust for FICA W/H (Tax Codes - Basis) is Yes, then the Annual State Wages are reduced further by Subtracting the Annual FICA Withholding up to the amount specified as the Max YTD FICA W/H (Tax Codes - Basis) and by subtracting the Annual Medicare Withholding up to the amount specified as the Max YTD Medicare W/H (Tax Codes - Basis).
6. The Annual State Wages are reduced multiplying the Annual Federal Withholding Tax by the State's Fed W/H Adjust %. (Tax Codes - Basis).
7. The # of Exemptions (Employee - Rates and Taxes) is multiplied by the State W/H Allowance Amt (Tax Codes - Tax Tables) and subtracted from the Annual State Wages.
8. The Exemption Amount (Employee - Rates and Taxes) for the employee is subtracted from the Annual State Wages.
9. The following calculation is made: The # of Exemptions (Employee - Rates and Taxes) is multiplied by the Adj W/H Allowance Amt (Tax Codes - Tax Tables) and added to the Std Adj Deduction (Tax Codes - Tax Tables), the amount is then subtracted from Annual State Wages. If this calculation yields an amount is greater than zero, the amount is multiplied by the Adjustment % (Tax Codes - Tax Tables) and the Annual State Wages are reduced by this amount.

CALCULATE THE ANNUAL STATE WITHHOLDING TAX FROM THE TAX TABLE
10. The Annual Federal Withholding Tax Amount is then retrieved from the Tax Table (Tax Codes - Tax Tables).

CALCULATE THE PER PAY PERIOD STATE WITHHOLDING TAX
11. The Annual State Withholding Tax is divides by the Periods Per Year  (Payroll Parameters - General) of the employee's pay frequency to calculate the per pay period State Withholding Tax.

REDUCE THE PER PAY PERIOD STATE WITHHOLDING TAX
12. The Employee's State Tax CR (Employee - Rates and Taxes) is then subtracted from the State Withholding Tax for the pay period.

INCREASE THE PER PAY PERIOD STATE WITHHOLDING TAX
13. If the Employee's State Added W/H Amount (Employee - Rates and Taxes) is not zero, then .increase the per pay period State Withholding Tax by the specified amount. If the percentage was specified, then increase per pay period State Withholding Tax by the percent specified.

If the State Tax Calculation Basis (Tax Code - Basis) is (P)ct of Fed and the Employee's State W/H # of Exemptions (Employee - Rates and Taxes) is NOT 99, the State Taxes are calculated as follows:

CALCULATE THE ANNUAL STATE GROSS WAGES
1. Annualize the State Gross Wages by Multiplying the Gross State Wages (Taxes - Payroll Processing) for the period by the Periods Per Year (Payroll Parameters - General) of the employee's pay frequency.

CALCULATE THE ANNUAL STATE WITHHOLDING TAX FROM THE TAX TABLE
2. The Annual Federal Withholding Tax is calculated by multiplying the Gross State Wages (Taxes - Payroll Processing) by the Periods Per Year (Payroll Parameters - General). The tax amount is then retrieved from the Tax Tables (tax Codes - Tax Tables)..

CALCULATE THE PER PAY PERIOD STATE WITHHOLDING TAX
3. The Annual State Withholding Tax is divided by the Periods per Year (Payroll Parameters - General) of the employee's pay frequency to calculated the per pay period State Withholding Tax.

REDUCE THE PER PAY PERIOD STATE WITHHOLDING TAX
4. The Employee's State Tax CR (Employee - Rates and Taxes) is then subtracted form the State Withholding Tax for the pay period.

INCREASE THE PER PAY PERIOD STATE WITHHOLDING TAX
5. If the Employee's State Added W/H Amount (Employee - Rates and Taxes) is not zero, then increase the per pay period State Withholding Tax by the specified amount. If a percentage was specified the increase per pay period State Withholding Tax by the percent specified.