Employee Withholding Examples

You can calculate and track employee withholdings based on an employee's gross wages or the location where work is performed.

Use the tax locale feature to track work based on where work is performed. If you use the tax locale feature, the employee's withholdings are based on project or employee settings. You establish employee withholdings on the Withholdings grid on the Payroll tab in the Employees hub. You determine which method DPS uses based on project tax locale options established on this tab and in the Projects hub.

Locale Method Calculation Example

For a salaried employee where the Locale Method is Follow Project Locale and the salary for each pay period is $1000:

Locale Method Calculation
Total Regular Hours Worked	In Massachusetts (MA), the total regular hours worked = 60. In California (CA), the total regular hours worked = 20.
Calculation	The MA withholding is based on taxable wage $1000 * (60/80) =$750 The CA withholding is based on taxable wage $1000 * (20/80) =$250

Percent of Wages Calculation Example

For a salaried employee where the Locale Method is % of Wages and the salary for each pay period is $1000:

Percent of Wages Calculation
Withholding	In Massachusetts (MA), the percent = 70 In California (CA), the percent = 30 (For % of Wages, the summation for withholdings must equal 100.)
Calculation	The MA withholding is based on taxable wage $1000*.7=$700 The CA withholding is based on taxable wage $1000 *.3 = $300