Understanding Tax Data
Payroll Interface does not calculate taxes. You use Payroll Interface to track and export changes to tax data (primarily W4 withholding information) that occur during a pay period. The third-party payroll system performs all gross-to-net calculations.
To set up tax information correctly, you must understand the data mappings between PeopleSoft HCM and the third-party payroll system. You generally want to export some type of code or numeric value. If an employee works for multiple companies, then you must set up tax data for each company.
Note: To simplify data entry, conversion, and maintenance issues, you may want to have the third-party payroll system manage all tax information.
Tax Location Data
The Tax Location Table (TAX_LOCATION_TBL) component enables you to establish a tax location ID and to identify the work states, provinces, and localities that are associated with each tax location.
Note: If you've selected the Automatic Employee Tax Data option on the Product Specific Page of the Installation Table (INSTALLATION_TBL) component, PeopleSoft automatically sets up tax data for each work and resident state and locality of each of your employees. Tax distribution records are created for the work state or locality if the tax location represents a single state or locality.
Note that if the Use State Residence for Local option is selected, the system does not select the Resident check box automatically on the newly added local tax data row when 1) an employee transfers to a different work location in the same resident state, or 2) a new employment instance is added for a different work location in the same resident state. Refer to the Understanding Resident Locality in Local Tax Data section for more information.
Tax Distribution Data
Every employee must have at least one Tax Distribution record. The system automatically populates the State, Province, and Locality fields from theTax Location field on the employee's Job Data record. The state and locality codes come from the Tax Location table.
Employee Tax Data
You will use the Employee Tax Data pages to enter and maintain federal, state, and local tax data for each of your employees.
Note: If you've selected the Automatic Employee Tax Data option on the Product Specific Page of the Installation Table component, PeopleSoft automatically sets up employee tax and tax distribution data when an employee is hired, transfers to another company, or changes jobs.
Note that if the Use State Residence for Local option is selected, the system does not select the Resident check box automatically on the newly added local tax data row when 1) an employee transfers to a different work location in the same resident state, or 2) a new employment instance is added for a different work location in the same resident state. Refer to the Understanding Resident Locality in Local Tax Data section for more information.
You can run SQR TAX016, the Default Tax Data Report, to verify automatically created tax data. This report tells you, within the date range that you specify, which employees have default data on their tax records.