1. Implementing Payroll for the United States
  2. Configure Organization Calculation Cards for the US

Configure Organization Calculation Cards for the US

The info you store in calculation cards help the HR and payroll processes calculate various component groups, such as tax rates and overrides. Organization calculation cards exist at both the payroll statutory unit (PSU) and tax reporting unit (TRU) levels.

You use the Legal Entity Calculation Cards task to configure calculation cards at the PSU level. The data you enter applies to all TRUs attached to the PSU. You use the Legal Reporting Unit Calculation Cards task to configure calculation cards at the TRU level.

Organization calculation cards capture:

  • Tax rates for state unemployment insurance (SUI) and state disability insurance (SDI)

  • Self-adjustment settings such as self-adjust, quarterly self-adjust, or no self-adjust

  • Federal tax withholding rule

  • State resident wage accumulation rule

  • Overrides such as a supplemental earnings tax rates

There are multiple steps involved with defining organization calculation cards.

What you want to do

How you do it

Create the PSU card

Use the Legal Entity Calculation Cards task from your implementation project.

Define federal tax rules

Vertex provides all statutory compliance for the payroll process. However, you can set various federal tax rules on the PSU cards.

You set these on the Federal component groups.

Define regional tax rules

You can set various regional tax rules on the PSU cards, such as for state, county, and city.

You set these on the Regional component groups.

Create the TRU card

Use the Legal Reporting Unit Calculation Cards task from your implementation project.

For further info, see the following sections.

How You Create the PSU Card

To create organization calculation cards at the PSU level:

  1. Start the Legal Entity Calculation Cards task from your implementation project.

  2. Click Create.

  3. Provide the effective date, and select Calculation Rules for Tax Reporting and Payroll Statutory Unit.

  4. Click Continue.

  5. If regional components don't already exist in Component Groups:

    1. Click Regional.

    2. Click Create from the Actions menu.

    3. Create nodes for each state you need.

  6. Click Save and Close.

How You Define Federal Tax Rules

Vertex provides all statutory compliance for the payroll process. However, you can set the following on the organization cards.

  • Federal tax rules, such as:

    • Supplemental calculation method for federal income tax (FIT)

    • Withholding rules for FIT

    • Period-to-date calculation method for FIT

    • Self-adjustment methods for federal unemployment tax (FUTA), Social Security, and Medicare

  • Flat tax rate overrides for retirees

To configure these:

  1. Open the PSU calculation card for editing.

  2. In Component Groups, click Federal.

    The Calculation Components table lists rows for each federal tax.

  3. Select the row of the tax you want to edit.

    The Details section updates for the selected tax type.

    If a tax type is missing, click Create to add it.

  4. Enter the appropriate FIT-specific rules.

    Rule

    What it does

    Where you can find it

    Supplemental Tax Calculation Method

    For flat or aggregate rates on supplemental earnings.

    Calculation Component Details

    Tax Withholding Rules

    For determining which states are applicable for resident taxation.

    Calculation Component Details

    Enable Period-to-Date Tax Calculation

    For determining if state and federal taxation is considered based on either the Run or Period-to-date.

    Calculation Component Details

    Enforce Federal Income Tax Look-Back Rule

    For enforcing the look-back rule from the previous and current year to determine proper withholding for supplemental earnings.

    Enterable Calculation Values on Calculation Cards

  5. If the tax type provides an Enterable Calculation Values on Calculation Cards tab, select it and click Create to define any needed rate overrides.

  6. Repeat to add self-adjustment settings for Social Security, Medicare, and FUTA.

    These rules determine how the payroll process adjusts for rate or wage base changes.

    For further info, see the next section, How You Define Regional Tax Rules.

  7. Click Save.

For further info, see Federal Unemployment Tax Act Calculations in the Help Center.

How You Define Regional Tax Rules

Vertex provides all statutory compliance for the payroll process. However, you can set the following on the organization cards.

  • Regional tax calculation rules, such as:

    • Supplemental calculation method for state income tax (SIT)

    • Resident wage accumulation for SIT

    • County and city tax withholding rules for SIT (courtesy tax withholding)

    • Self-adjustment methods for state unemployment (SUI) and disability insurance (SDI)

    • SUI and SDI employee and employer rates

    • California Voluntary Insurance Disability Plan (VPDI) implementation

    • Eugene, Oregon Community Safety Tax exemptions

    • New York state family leave insurance (FLI)

    • Pennsylvania residence tax info for out-of-state work locations

    • Washington state FLI

  • Flat tax rate overrides for retirees

To configure these:

  1. Open the PSU calculation card for editing.

  2. In Component Groups, expand the Regional node.

    This node lists the hierarchy of regional nodes, as you defined them during card creation.

  3. Select the node you want to change.

    The Calculation Components table lists rows for each appropriate regional tax.

  4. Select the row of the tax you want to edit.

    The Details section updates for the selected tax type.

    If a tax type is missing, click Create to add it.

  5. Select Calculation Component Details, and enter the required info.

  6. If the tax type provides an Enterable Calculation Values on Calculation Cards tab, select it and click Create to define any needed rate overrides.

  7. Repeat for each regional tax type.

  8. For states that have additional taxes in conjunction with SUI or SDI, you must increase your SUI employer or SDI employer rates appropriately.

    Carefully examine your rate notifications to see if the state has included these special taxes in the overall rate notification.

    For example, these special taxes are cases where this kind of SUI rate adjustment is needed.

    • Massachusetts SUI Workforce Training Fund

    • Minnesota SUI Federal Loan Interest Assessment

    • Nevada SUI Career Enhancement Program

    • Nevada SUI Bond Obligation Assessment

For additional info on various regional tax rules, see the following in the Help Center.

  • California Voluntary Plan Disability Insurance

  • California Wage Plan Code

  • Courtesy Withholding Taxes

  • DC Paid Family Leave

  • Eugene Oregon Community Safety Tax

  • Federal and Regional Taxes for the US

  • Federal Loan Interest Assessment for Minnesota State Unemployment Insurance

  • Massachusetts Paid Family and Medical Leave

  • New Jersey Disability Insurance

  • New Jersey Family Leave Insurance

  • New York Family Leave Insurance

  • Pennsylvania Local Earned Income Tax

  • Pennsylvania Local Services Tax

  • Pennsylvania Tax Exemptions

  • Puerto Rico State Unemployment Special Assessment Tax

  • Self-Adjustment Methods for Tax Withholding

  • Washington Paid Family Leave Tax

How You Create the TRU Card

After you have set up your TRUs, you can set TRU-level overrides using the Legal Reporting Unit Calculation Cards task. This includes flat rate FIT and SIT overrides for retiree payments.

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