How the Payroll Process Uses Tax Jurisdictions

When you perform a payroll run, the process uses tax jurisdictions in several ways.

1. The process determines if there are any earnings with jurisdiction overrides entered as element entries on the elements (tagged earnings).

   For example, you want to enter 8 hours of time worked in a different location than where the person normally works. When tagged as such, the payroll process taxes the calculated pay for those units of time at the designated jurisdiction. If the employee doesn't have withholding elections for the tagged jurisdiction, the process automatically calculates the tax at the highest withholding status or allowance elections.

2. It determines if there's any allocation configured on Employee Earnings Distribution Override card.

3. It determines the tax jurisdictions as set on the employee's Tax Jurisdictions card.

4. It determines the related withholding status and any additional info from the Tax Withholding card.

5. Based on this, it extracts the relevant regional tax data from the value definitions and values by criteria available in the application.

6. It determines state reciprocity rules.

7. It calculates the taxes.