Sample Setup for Percent of Wages Option

If you are new to Payroll, you may find it helpful to review an example of how to set up Payroll to implement the Percent of Wages option.

Your company's headquarters are in California, but you have an office in Oregon. Brenda Gray spends time in both offices. You want to track Brenda's wages and withholdings based on the state in which Brenda performs work. The Follow Project Locale method of tracking withholdings does not work in this case because Brenda's work is not tied to a specific project. You decide to use the Percent of Wages method.

To track wages and withholdings by a percentage of wages:

  1. In the Navigation pane, select Hubs > Employee > Employees.
  2. Open the employee record for Brenda Gray and click the Payroll tab of the Employees form.
  3. In the Withholdings grid, make sure that withholdings for California and Oregon are set to Active and set the Method option to System so that Vantagepoint refers to tax tables when making tax calculations.
  4. Set the Locale Method field to Percent of Wages.
    Both CA and OR display in the State/Local/Tax Jurisdictions grid.
  5. Make these entries in the State/Local/Tax Jurisdictions grid:
    • In the CA Percent of Wages field, enter 80 to designate that 80% of Brenda's time is spent working in California.
    • In the OR Percent of Wages field, enter 20 to designate that 20% of Brenda's time is spent working in Oregon.
  6. Brenda fills out a timesheet and charges 80 hours to an overhead project.
    Vantagepoint does not refer to the timesheet to calculate withholdings when using the Percent of Wages method. Instead, Vantagepoint uses the percentages that you specify in the State/Local/Tax Jurisdictions grid of the Payroll tab in the Employees hub.
  7. In the Navigation pane, select Payroll > Payroll Payments, select payroll options for the run, and make sure that Brenda Gray is selected for the payroll payment run.
  8. Run a draft Payroll Journal and review how withholdings are divided between California and Oregon.
  9. Process payroll.
  10. Print checks.
  11. Preview the check and review how withholdings are broken out between California and Oregon.
  12. Assign check numbers.
  13. Post payroll.
  14. Run the Payroll Posting Log and review how withholdings are broken out between California and Oregon.