Federal Income Tax

For federal taxes, you specify the status and exemptions.

Deltek Modification Date - 12/16/16

Enter the following field information on the Withholdings grid on the Payroll tab of the Employees hub:

Field	Description
Filing Status	Enter the marital status claimed by the employee for federal income tax purposes on Form W-4. Options are: S: Single. M: Married. H: Head of household. 1: Head of Household (Non-Resident Alien) 2: Married (Non-Resident Alien) 3: Single (Non-Resident Alien) If you enter a status of Married, but withhold at a higher Single rate on the W-4 form, enter a status of S on the Withholdings grid.
Exemptions	Enter the number of exemptions claimed by the employee on federal Form W-4. This figure includes: Personal exemptions for self and spouse not claimed on other Form W-4 Additional exemptions for age and blindness Exemptions for dependents
Other Exemptions	Federal tax calculations do not use the Other Exemptions field.

Supplemental Wages

The tax rate for supplemental wages (bonus runs) is 39.6% when the bonus amount is over a million dollars. Otherwise the rate is 25%.

Automatically Calculated Variables

Deltek automatically computes the allowance, which is used in calculating the net income tax.

Allowance

The Allowance is based on the number of withholding exemptions entered in the first Exemptions field. It is determined by multiplying the number of exemptions by $4,050.

Nonresident Alien

The Nonresident alien adjustment amount is $2,300.

How Deltek Calculates Tax

To calculate an employee's Federal tax, Deltek does the following:

1. Multiplies the employee's gross pay per pay period by the number of pay periods in a year to determine annualized gross wages.
2. Subtracts the employee's allowance, 401(k) Plan contributions, and 125/Cafeteria Plan contributions from the employee's gross wages for the pay period to determine taxable income.
3. Calculates the net income tax using Tax Calculation Method 1.
4. Divides the net income tax by the number of pay periods in a year to determine the amount to be withheld for the pay period.