Before an earning or deduction can be added, a tax compliance rule must be configured. Tax compliance rules are values that determine how earnings are taxed and how deductions are applied to an employee's wages. Wages are the derivative of earnings and deductions as recognized by a taxing authority.
You can view tax compliance rules in Payroll Setup > Earnings and Deductions by clicking the Tax Compliance Rules tab. You can then click the Earning or Deduction tab to view a list containing the system tax compliance rules that have already been configured in your instance for earnings and deductions. If any custom tax compliance rules have been created in your instance, you can view those as well, or you can create new custom tax compliance rules as needed.
When you select a rule in the list and click the country-specific tab (for example, United States), Dayforce displays the read-only tax settings for the rule. For more information on system tax and compliance rules, see the Tax and Compliance Reference Sheet included in the Dayforce documentation set.
To add a tax compliance rule to a deduction or an earning, you can use one of the existing tax and compliance rules, or you can create a custom rule.
- To use an existing rule, select one of the existing rules from the list that matches the earning or deduction definition to review its details.
- To create a custom rule, click Add to configure a custom rule, or click Copy to select an existing rule from the list and create a custom rule.