The Internal Revenue System (IRS) and states impose some form of payroll taxes on companies (employers), their employees, and independent contractors. These taxes are applied on each paycheck issued to them. In order to run a payroll, all required taxes must be in the Payroll system.
There are two levels of taxes in Core Payroll:
- Employee taxes
- Company taxes
There are two ways to set payroll taxes in Core:
- Automatic tax assignment
- Manual tax assignment
Automatic Tax Assignment (Employee Taxes)
You can start by making sure your employee addresses including Zip and State (say CA for California and NY for New York) are filled in the Employees > General > Details screen. This prefills all the default taxes in Core based on the address provided.
Automatic Tax Assignment (Company Taxes)
You can start by making sure your company address, including Zip and State (say CA for California and NY for New York) are filled in the Company Profile screen (main company menu > Settings). This prefills all the default taxes in Core based on the address provided.
Manual Tax Assignment (Employee and Company Taxes)
Adding taxes to the payroll system in Core manually needs a better knowledge of payroll taxes. You can add state taxes to Core via Lists > Payroll > Taxes. After selecting your company or employee Resident State, it shows all the relevant taxes that you can choose from.
You can also do this from the Employees > Payroll > Details tab, where you can select the Resident State and Core adds the relevant taxes to the payroll system.