Aggregate Taxation of Multiple Checks

Aggregate taxation of multiple checks is appropriate when you must pay an employee more than once (multiple confirmed pays) within a single pay period, such as a weekly employee who is paid for several different jobs or assignments within the week. Aggregate taxation prevents the system from taxing each payment as if the earnings were for the entire week, which would result in underpayment of taxes.

The aggregate tax method works by totaling the payments identified for aggregate taxation, calculating what the withholding tax should be on the aggregate total for the period, subtracting what's already been withheld in previous payments, and withholding the difference on the paycheck currently being processed.

To aggregate taxation of multiple checks:

1. Verify that the tax method specified for the earnings code on the Earnings Table – Taxes page is Specified on Paysheet.

2. Enter the identical value in the Aggregate ID field on the pay calendars for all pay runs that you want to aggregate.

   To aggregate taxation across multiple checks, the pay calendar Aggregate ID field must be populated with a value. The system aggregates together all pay calendars with the same aggregate ID value (including off-cycle payrolls) for the purposes of tax calculations. All wages paid on calendars with the same aggregate ID are combined, then annualized and taxed accordingly. This is the only purpose for the Aggregate ID field on the pay calendar.

   Note: If you are processing an off-cycle against the on-cycle calendar, you must enter the aggregate ID only on the on-cycle calendar. To add standalone off-cycle calendars to be aggregated together, the pay period end date must be the day after the first confirmed check's pay period end date.

   If you enter the same aggregate ID on multiple pay calendars, then for a given employee, each succeeding check (whether off-cycle or on-cycle) calculated under each of these pay calendars is aggregated with all of the already-calculated qualifying checks of the previous pay calendars which were set up using the same aggregate ID.

   If a pay calendar has a unique aggregate ID, then for a given employee, succeeding off-cycle and on-cycle checks are aggregated with any already-confirmed qualifying off-cycle checks for that pay calendar.

3. On the off-cycle paysheet, change the tax method to Aggregate.

   This step is not required for on-cycle checks that are processed against on-cycle calendars using the same aggregate ID. When the paysheet is system-generated, the tax method is set to aggregate, and can be viewed in the Additional Data link on the payline.