Employee Data: Taxes
Objectives:
Learn about the Taxes tab within AllPay. This is where an employee's tax information is stored, including for state, local, and federal taxes.
What's in this article?
An overview of what is on the Taxes tab and how it ties into payroll.
💡Good to know: This is part of a collection of guides about employee data in AllPay. This data in particular is relevant to payroll processes.
AllianceHCM tips: Keep an eye out for tips from our experts!
Taxes
Log in to AllPay and from the Employees module or menu, choose the Taxes section.
Here we're looking at the tab for our selected employee. You can see from the filters at the top that we’re looking specifically at the employee data for Serenie Beanie. Each row is an individual tax entry for the employee.
You can click on the Add New option in the top right corner to add another entry. AllPay has a long list of state, local, and federal tax codes you can choose from for a new entry.
AllianceHCM tip: The Taxes tab will need to be updated when someone has a new Form W-4.
In the top right corner is also an option to Change State. This is the state that the taxes will be affiliated with. This can be handy if an employee moves from one location to another location in a different state.
Let’s look specifically at the Federal Income Tax entry. There’s a check box labeled Is 2020+ W4? Newer W-4s, ones after 2020, need to have this box checked and require a dollar amount to be specified.
If the Is 2020+ W4? box is unchecked, then it reverts to information a W-4 would require before 2020 with exemptions.
If you have an employee who is exempt from Federal Income Tax, then you’d want to tick the box that says Take Only Additional and leave the Additional Amount field blank. In effect, you’re telling the system you only want to take the additional amount you specify, and that amount is zero, therefore the system won’t take any federal income tax from this employee.
One note about those who are exempt from Federal Income Tax: If they are still W-2 employees, then they probably still have to pay Medicare and Social Security. Only a few employees, such as those on specific visas, can avoid Medicare and Social Security taxes, and those are both set percentages. An employee might be exempt from Federal Income Tax but they probably still have to pay Medicare and Social Security.