To change company taxes for a specific worker, click on the Company Taxes tab of the worker record. While company taxes can be individually configured by worker, usually company taxes are set up globally in EBMS. To set up company taxes for all workers, open the Labor > Labor Options > Worker Categories tab.
Highlight the very top category folder (Workers, in the example above) and click the Edit Defaults button. From the open worker category defaults page, go to the Company Taxes tab. Review the Setting Worker Defaults section for more details on employee defaults.
The steps to edit or add a company tax are very similar to adding an employee withholding tax.
Follow the steps listed below to set up a company tax or deduction:
Add or Edit Taxes from Default Company Taxes Tab
From the Company Taxes tab on the worker category defaults page, highlight a tax in the list and click on the Properties button to edit any existing tax information. Company taxes or deductions will have Company selected in the Paid By field. The Paid By field selection is the difference between worker taxes (paid by the workers themselves) and company taxes (paid by the company).
Click on the New Tax button to create and add new taxes to the list. The following window will appear if either button is clicked.
Adding a Company Tax or Deduction
To add a new company tax or deduction on the Employee Taxes page, a valid Tax must be selected from the tax list. To select a tax, click on the magnifying glass option to the right of the tax field and select a valid tax.
To create a new tax for the list, go to Labor > Taxes/Deductions from the main EBMS menu. Review the Adding New Taxes and Deductions section for more details on entering or editing taxes or deductions. EBMS contains many of the common taxes, but it is best practice to verify that the correct rates are entered for each tax before you process any payroll.
Changing a Tax
When editing tax properties, the user cannot change the Tax identification code. To change the Tax ID, the original tax must be made inactive and a new tax line added. A tax with any history cannot be deleted but should instead be made inactive by selecting the Inactive (no taxable) deduction formula option. Find the Deduction Formula by highlighting the existing tax to deactivate and clicking the Properties button.
To remove a tax entry that has never been used, highlight the Tax ID on the Company Taxes tab, and click on the Delete button to remove a tax entry that has never been used.
Certain options for the Deduction Formula are used to add additional taxes to the standard rate. (Add __%, Add $__, etc.) The deduction formula should be set to Equal to Tax/Deduction Rate for all company taxes except in very rare occasions.
Set the Expense G/L Code to a General Ledger overhead account to record the expense of this tax. Since employee taxes are withheld from the employee’s check they are not recorded as an expense to the company, but company taxes are paid by the employer, and must be recorded within an expense G/L account. Click on the magnifying glass icon to view and search the available General Ledger accounts. The tax expense codes should be located within the expense folder of the ledger.
Click OK to save changes.
Repeat the steps listed above for each tax that you wish to add or edit.
Pretax NOTE: The worker's taxable wage is the wage base for any pretax company-paid tax or benefit. Therefore, a company tax is only processed as pretaxed if there is a worker withholding deduction with the same Tax ID or tax type.
View Year History
Select the correct year tab to view annual tax or deduction history. These year tabs may not appear on the worker category defaults page, but they will appear on the Company Taxes tab for individual worker records.
Double-click on a worker in the Labor > Workers table to open the worker record. Go to the Company Taxes tab. Highlight a Tax ID in the list and click Properties to view the tax history for the individual worker. (See image below.)
Click on one of the year tabs to view the tax history for the selected year.
