Payroll taxes in the Payroll feature can be viewed in Payroll Setup > Payroll Taxes
The Payroll Setup > Payroll Taxes feature is a reference for all of the payroll tax authorities configured for your instance of Dayforce, and depends on the countries configured for your instance in Org Setup > Organization.
There are two areas in Dayforce where payroll taxes can be viewed or, in some cases, set up:
- Payroll Setup > Payroll Taxes: Covered in this topic and related topics. Payroll taxes can be viewed here, but not added or configured. WFM-only customers do not have access to this feature area.
- Org Setup > Org Payroll Setup > Legal Entity: Payroll taxes can be added to legal entities and configured in this location in the Tax Authorities tab. Payroll taxes are configured here for Payroll-only customers, because the legal entity is essential to payroll processing, whether or not Dayforce is the system of HR record.
Taxes configured at the system level for the Dayforce Payroll feature can be viewed in Payroll Setup > Payroll Taxes. Users cannot add or remove taxes in Payroll Setup > Payroll Taxes. It is a reference for all of the taxes that can be assigned to or configured for legal entities and their employees in Org Setup > Org Payroll Setup > Legal Entity. Tax authorities for legal entities must be set up as well.
When you go to Payroll Setup > Payroll Taxes, a screen loads with a filter section and a list of all taxes configured for your instance of Dayforce, as seen in the following screenshot:
| Column | Description |
|---|---|
| Tax Code | Used to identity the specific tax. Corresponds with the Tax Authority field in the Tax Authorities tab in Org Setup > Org Payroll Setup > Legal Entity. |
| Tax Type | Describes the tax type, which, depending on the country, can be Federal, State, Possession, County, City, Borough, Township, Village, School District, or Other. |
| Country |
Country of the tax. Important: Canadian taxes aren’t listed in this feature, but can be viewed in the Tax Authorities tab in Org Setup > Org Payroll Setup > Legal Entity. |
| Tax Name | The name of the tax, which is displayed in earning statements and payslips. |
| Description | A description of the tax. |
| Employee Tax | Checkmark to indicate that the tax is employee-paid. |
| Employer Tax | Checkmark to indicate that the tax is employer-paid. |
| Generate Tax in Setup Pay Run | Checkbox. Used when an imported pay run might be missing information (incomplete historical data). When this option is selected, Dayforce calculates tax amounts based on imported earnings. See Important note below when the Calculate Payroll background job runs. |
| Generate Wages in Setup Pay Run | Checkbox. Used when an imported pay run might be missing information (incomplete historical data). When this option is selected, Dayforce calculates tax amounts based on imported earnings when the Calculate Payroll background job runs. See Important note below. |
| Ledger Code | Used to enter an assigned string of alphanumeric characters that define the location of the tax expense in the general ledger. |
| Reference Code | Cross-reference code (XREF code) used for imports and exports. |
About the Generate Tax in Setup Pay Run and Generate Wages in Setup Pay Run options: it is crucial that you select these options only when an imported pay run is missing tax or wage amounts that need to be calculated to correct missing information. Calculated amounts never overwrite imported amounts. If there are imported amounts that need to be corrected, the data must be reimported.
If you select either of these checkboxes for tax authorities, when you run Process Job > Calculate in Payroll > Pay Run Management, or if you run the Calculate Payroll background job in System Admin > Background Jobs (specifying the pay run’s start and end date in the background job parameters), the background job calculates the tax and wage amounts for the corresponding tax authorities. As a result, Dayforce creates additional records in the pay run results for the calculated amounts: it does not modify any imported values.
This means that if a tax or wage amount for a tax authority was imported and then incorrectly flagged for recalculation, by selecting either the Generate Tax in Setup Pay Run or Generate Wages in Setup Pay Run checkbox, both the imported and the calculated amount records are included in the pay run results, and the amounts will be doubled.