Example of Loading Wage Basis Rules
Use HCM Data Loader to load wage basis rules to determine the earnings that are subjected to a deduction.
To illustrate how wage basis rules affect a tax calculation, let's look at an example where an employee's earnings included in the wage basis vary, depending upon where the employee lives.
Brittany is a salesperson who receives a salary of 2,000 each month. Brittany also has a company car she drives. She is responsible for reporting her personal use of the company car in order to be taxed correctly.
Brittany works in her company's East Coast district. She spends 50 percent of her time in New York and 50 percent of her time in Pennsylvania. The State of New York taxes Brittany for her personal use of the company car; however, Pennsylvania doesn't.
Last month, Brittany reported personal use that equated to 100 (50 personal use in New York and 50 personal use in Pennsylvania).
In New York, the imputed earnings, such as personal use of company car amounts are included in the taxable wages. Whereas, in Pennsylvania, these earnings aren't included in taxable wages.
This table shows the tax calculations that apply for each region.
|
Region |
Earnings in Salary |
Eligible Imputed Earnings |
Taxable Income |
Deduction Amount |
|---|---|---|---|---|
|
New York |
1000 |
50 |
1050 |
35 |
|
Pennsylvania |
1000 |
50 - Exempt |
1000 |
30 |
Here are the wage basis rule for this tax calculation.
|
Region (Reference Value) |
Primary Classification |
Secondary Classification |
Use in Wage Basis? |
|---|---|---|---|
|
New York |
Standard Earnings |
Regular |
Y |
|
New York |
Imputed Earnings |
Personal Use of Company Car |
Y |
|
Pennsylvania |
Standard Earnings |
Regular |
Y |
|
Pennsylvania |
Imputed Earnings |
Personal Use of Company Car |
N |
Use this TaxabilityRule.dat to load the wage basis rules.
METADATA|TaxabilityRule|EffectiveStartDate|LegislativeDataGroupName|PayrollComponent|PrimaryClassification|SecondaryClassification|Context1|UsageType
MERGE|TaxabilityRule|2011/1/10|Vision Corp|State Tax|Standard Earnings|Regular|NY|P
MERGE|TaxabilityRule|2011/1/10|Vision Corp|State Tax|Imputed Earnings|Personal Use of Company Car|NY|P
MERGE|TaxabilityRule|2011/1/10|Vision Corp|State Tax|Standard Earnings|Regular|PA|P
MERGE|TaxabilityRule|2011/1/10|Vision Corp|State Tax|Imputed Earnings|Personal Use of Company Car|PA|N