About local payroll taxes

Many counties and municipalities levy income taxes. In the Local Payroll Taxes window, set up the table of local payroll tax districts and their rates. You can then assign the locales to the appropriate job and employee records. If an employee lives in a locale, add the locale to the employee’s record. If a job site is located in a locale, add the locale to the job record.

There are a variety of ways to set up the districts:

Some districts base the taxes on whether the employee lives inside or outside the locality. The resident rate applies to employees that work and live in the same locality, while the non-resident rate applies to employees who work in the locality but live elsewhere.

During the payroll computation, Sage 100 Contractor compares the locale in the job record to the locality in the employee record. If the districts match, Sage 100 Contractor computes taxes at the resident rate. If the district numbers differ, Sage 100 Contractor computes taxes at the non-resident rate.

In some regions, employees are subject to several taxes, such as city and county income taxes. As Sage 100 Contractor only lets you assign one locality to a job record, employee record, or timecard line, you can combine districts in the Local Payroll Tax window to form a new district. You can then assign the combined district as needed.

When a local payroll tax applies to employees regardless where they work, you can set up the district to work like state income tax.

When employees work multiple states but there are no local payroll tax districts, use the districts to control how Sage 100 Contractor computes state income tax for each timecard line.

Each locality requires a corresponding payroll calculation. In most circumstances, each payroll calculation uses calculation method 17-Tables, and refers to the table of localities for the rates.