Tax Calculations and Methods
Payroll comes with a set of built-in federal, state, and local tax tables used to calculate tax withholdings. Deltek provides three yearly payroll updates to these tax tables. Updates are typically sent in December, January, and July.
When you calculate your federal, state, and local tax withholdings manually, you refer to the tax table that lists the amounts that should be withheld each pay period. The Payroll application, however, usually calculates withholdings on an annual basis, and then divides the annual amount among the payroll periods.
Tax Calculation Variables
Deltek uses exemption and filing status information to calculate the variables that it needs to determine the state or local tax withholding. These variables include:
- Standard deductions
- Additional deductions
- Allowances
- Credits
Tax Calculation Methods
Most state and local tax authorities use one of three tax calculation methods:
- Tax Calculation Method 1: Wage Bracket
- Tax Calculation Method 2: Percentage of Taxable Pay
- Tax Calculation Method 3: Percentage of Federal Income Tax
Refer to the "Tax Calculation Method" online help topics to learn about how these methods are used. Refer to the state and local tax fact topics to find out which method is used for a particular state or locality.