Workers' Compensation Maintenance
Enter the state tax code representing the state for the workers' compensation code you want to add or maintain. Click the Lookup button to list all state tax codes.
Enter the workers' compensation code you want to add or modify. Click the Lookup button to list all workers' compensation codes for the current state.
Note To calculate workers' compensation for the SUI state instead of the primary state, you must set up a workers' compensation code under the primary state, but enter the description, calculation method, rate, etc., of the SUI state.
Enter a description for the workers' compensation code.
Select one of the following calculation methods to indicate how the tax amount will be calculated.
Hours Worked
Percent of Gross Earnings
Adjusted Percentage (gross earnings minus pension plan deductions, cafeteria plan deductions, or pension and cafeteria plan deductions)
Fixed Amount
Days Worked
Note The Adjusted Percentage calculation method should be used only if no more than one workers' compensation code is used for each employee.
Select whether to deduct pension plan and/or cafeteria plan contributions from gross earnings before the workers' compensation tax amount is calculated.
Select Pension Plan to deduct pension plan contributions.
Select Cafeteria Plan to deduct cafeteria plan deductions.
Select Both Plans to deduct both pension and cafeteria plan deductions.
This field is available only if Adjusted Percentage is selected in the Calculation Method field.
Select the overtime calculation method.
Select Straight if overtime pay is taxed at a straight rate. The total of the regular and overtime hours will be used as the wage base.
Example
Regular wages: $1,000
Overtime wages: $200
Wage base: $1,200
Select Factored if overtime pay is taxed at a factored rate. In other words, only the straight time portion of overtime is subject to the tax.
Regular wages: $1,000
Overtime wages (calculated as 1.5 times regular wages): $200
Wage base: 1,000 + (200/1.5) = $1,133.33
If you selected Hours Worked in the Calculation Method field, the Factored option is not available.
Select None if overtime pay is not subject to this workers' compensation tax.
This field is available only if you selected Hours Worked, Percent of Gross Earnings, or Adjusted Percentage in the Calculation Method field.
Select the deduction limit. This field is also used to determine the reporting period for this workers' compensation code.
Select Monthly if the deduction limit is a monthly limit.
Select Quarterly if the limit is a quarterly limit.
Select Annual if the limit is an annual limit.
Enter the effective date for the selected Workers' Compensation code or click the Calendar button to select a date from the calendar.
The payroll check date is compared with the effective date to determine which rate or amount is used.
For example:
- Your pay period runs from June 24 through July 6.
- Your check date is July 7.
- Your rate has July 1 as the effective date.
The rate with the effective date of July 1 is used to calculate Workers' Compensation for the entire pay period beginning June 24.
Enter the employer rate or amount for the selected Workers' Compensation code.
Note If you change a rate or amount after it's been used to process payroll, the payroll history is not updated to reflect the change.
Enter the employee rate or amount for the selected Workers' Compensation code.
Note If you change a rate or amount after it's been used to process payroll, the payroll history is not updated to reflect the change.
This field is available only if the selected state requires employees to pay for a portion of their Workers' Compensation insurance.
Enter the tax amount beyond which no more tax will be calculated. Enter 0 if there is no limit and the tax should be continuously calculated.
When determining whether the contribution limit has been reached, the employer-paid premium is taken into account first during the tax calculation.
For example:
The annual contribution limit is $700, and the year-to-date combined employer- and employee-paid premium for an employee is $650.
For the next payroll run, without taking the limit into account, the employer- and employee-paid premium would be $40 each.
Because the employer-paid premium is calculated first, the employee's next pay calculation would include a $40 in employer-paid premium and a $10 employee-paid premium.
