Calculating FWT

This diagram illustrates the flow of FWT calculation:

This diagram illustrates the flow of FWT calculation.

FWT calculation

The system calculates FWT as a deduction (FWT) using the formula TAX FM FWT. The system includes this deduction in net pay calculation.

The calculation has three phases, based on tax method:

  1. Annualized

  2. Cumulative

  3. Supplemental (aggregate/percent)

The calculations are based on the bracket TAX BR FWT RATES, which contains the tax rates and set of variables that store key values such as exemption allowances and supplemental wage rate.

Note:

The default tax method is annualized. You can override the method that the system uses to calculate FWT.

See Overriding Tax and Payment Methods.