Payroll Tax Codes

Activate User's Guide
Version
2025.1
Payroll Tax Codes

Taxes are handled at a systematic level and by a Tax and Banking representative instead of the Implementation team.

The Payroll Tax Codes wizard doesn’t install any configuration into Dayforce. The wizard builds the legacy tax codes mapping to the Dayforce tax code values. This mapping is referenced during the YTD Data Load process.

Note: This wizard is currently only available for USA/CAN organizations.

Note: This wizard is the third of three that you must complete in sequence for the initial load of Deductions, Earnings, and Tax setup in Dayforce.

Note: If the wizard is completed in the Stage environment and the Stage environment is backfilled into the Config environment, the Payroll Tax Codes wizard shows as completed and includes the Add More option. See the Executing a Rollback When Using the “Add More” Feature in the Payroll Wizards topic.

Note: Activate shares all of your mappings across all applicable environments so you don't have to reconfigure each time you use a different environment. If the changes you make in one environment invalidate the mappings in another environment, Activate notifies you when you access a wizard with invalid mappings that need to be updated.

Note: You can use any of the following wizards even if any of the others is currently in use by other users: Payroll Deduction Code, Payroll Earning Codes, Payroll Tax Codes, Year-to-Date Payroll Totals (USA/CAN).

Using this wizard

The Payroll Tax Codes wizard guides you through questions and code categorizations that map legacy tax codes to existing HCM taxes. The HCM taxes include US/Canada Federal, Provincial, State, and Local tax codes. Activate lets you review all Tax Code mappings to ensure completion and accuracy before saving them for use in the Activate Year-to-Date Payroll Totals wizard.

When you add codes to the Payroll Tax Codes wizard, you must walk through a series of setup steps to make sure that the taxes have the right set up.

You’ll do the following in the Payroll Tax Codes wizard:

Upload the Tax YTD Data template

Use the Tax YTD Data template to upload the key information for initial setup of Tax codes. This data makes sure that Activate starts with the same codes that are currently in your legacy payroll system.

Note: Complete this step using present-day employee information.

Verify the information

After you import the Tax YTD data, the Payroll Tax Codes wizard creates a summary of the unique tax codes that are found in the templates. The summary includes the following information for each code:

  • Country
  • Payroll Identifier
  • Tax Code
  • Tax Description.
Categorize the tax codes

When codes are added in the Payroll Tax Codes wizard, you walk through a series of setup steps to make sure that the taxes have the right setup. Several of the Tax Question pages use Drag and Drop functionality. These pages require a direct hand to set up the data correctly. For information about the Drag and Drop pages, see the Drag and Drop Pages section (below).

Install the tax codes in Dayforce

When the tax codes are complete in Activate, install them in Dayforce.

Prerequisites

Complete the Payroll Earnings Code Wizard.

Tasks

To complete and upload the Tax YTD template
  1. In Activate Central, click Build Dayforce. The Build Dayforce wizards show.
  2. Click Payroll Tax Codes.
  3. On the Tax YTD Data page, click Download.
  4. Select the location where you want to save the template document.
  5. Open the TaxYTDTemplate.xlsx template on your computer.

    Note: The Activate release version shows in cell B3 on the Instructions tab of the template. This information helps you later determine the version of Activate you were using when you downloaded the template.

  6. On the TaxYTDData tab, complete all of the columns with the data for all employees in the organization.

    Note: Instructions for populating the fields are in the Tax YTD Data template fields section (below) and on the Instructions tab of the template.

  7. Click Save and close the template.

    You can use any file name for the template you upload. The file must be an Excel or CSV (Comma-Separated Value) document and contain the data in the required format.

    Important: The uploaded template must be the current Excel template file downloaded from Activate. Old templates aren’t accepted.

    Important: Don’t change the name of the tab in the template. Activate uses the tab name to validate that the correct template is being uploaded. In addition, don’t change the column headings.

  8. On the Tax YTD Data page, click Upload.
  9. Go to the completed Tax YTD template in the location where you saved it.
  1. Click Open.

    The Payroll Tax Codes wizard validates the uploaded file.

    Note: When you upload an Excel file, Activate includes the name of the uploaded file into the name of the XML file it generates and loads to the Dayforce File Server. The format of the generated XML file name is <NamespaceName>_<Import Type>_<file name provided>_YYY-MM-DD_HHMM. This information makes it easier to audit files later.

    Note: If the file you uploaded has any errors, a Validation Failed message shows in red at the bottom of the page. You must correct the errors in the file on your computer and upload the file again.

  2. Click Next.
To review the Summary table information:
  1. Review the Tax Code Summary table:
    • Make sure that no codes are missing.
    • Make sure that the data looks correct.
  2. If data is incorrect or missing, click Back and review the data imports.
  3. Click Next.
To categorize tax codes:
  1. On the Tell us about your taxes page, review the items on the page. When loading year-to-date payroll totals, determine if any codes included in the uploaded data shouldn’t be considered for mapping or taken into account. All unique tax codes uploaded to the Payroll Tax Codes wizard or moved from the Payroll Deduction Codes Wizard are listed in the “Uncategorized“ section on the left side of the page.

    Note: You can filter the shown codes by selecting All Codes, Mapped Codes, and Unmapped Codes.

  2. Items that aren’t assigned to a category show in the Uncategorized category.

    Using this page

    You can do the following on this page, as needed.

    • Filter the Uncategorized category to search for more categories.
    • To select all uncategorized codes, click Select All. When selected, the button name changes to Deselect All.
    • Click to expand a category and click to collapse a category.
    • Enter text in the Search field to search for a code on the page. To clear text in the Search field and clear the filter, click Clear (). The number of found codes per category is shown in red on the category tile.
    • Select the Information icon () next to a category section to show an explanation of the category.

    The following categories are shown on the page:

    • Map Code as Tax: Codes added here show on the following pages and be mapped to the corresponding Dayforce tax codes.
    • Drop Code from Wizard: Codes added here are dropped from the Payroll Tax Codes wizard. You aren’t asked to map them. You can check these codes for accuracy on the Final Tax Mapping Review page. Codes that are categorized as “dropped“ are dropped from Activate and aren’t installed to Tax Codes categorized as dropped. These codes aren’t included in the tax totals on the YTD Final Review page and aren’t used in XML generation. They show in the Tax Mapping file as “Dayforce Tax Code - Blank“ and “Dayforce Tax Name - Dropped from Import.“

  3. In the Uncategorized section, select the items to move to a category section and click the Move Right button (Move Right button.) beside the appropriate category to move the selected items to that category.

    Note: To select more than one item, click Ctrl+Shift.

  4. On the right side of each category, the total number of codes currently in that category shows. A warning or error icon shows next to the number of any codes in a category that have warnings or errors, a. If a code has an error and a warning, only the error code shows because it is the higher priority code.

    Note: To select and move more than one item at the same time, click Ctrl+Shift.

    Note: For information on the Drag and Drop pages, see the Drag and Drop Pages section (below).

    You can also drag the items to different categories, if needed.

    To filter uncategorized items:
    1. In the Uncategorized category, enter letters in the Filter field that are part of the name of the item you’re looking for.

      For example, you might enter “inc“ for income tax.

    2. Click Enter.

      Any items that include the letters you entered as part of their name show under the Filter field.

    3. Select and drag the item from the Uncategorized category to the box under the appropriate category, as needed.

      You can select more than one item and drag them all at the same time to the same category.

  5. When you’re finished, click Next.

    As you’re completing this wizard, you might need to exit Activate or move back through it. On any Questions page, you can click Save to save the information and update Activate.

  6. Repeat this process for any other items that are in the wrong category.
  7. To download the TaxMappingFile.xlsx file, click Download and save it to your computer.
    This Excel spreadsheet maps each Legacy Tax Code to its corresponding Dayforce HCM Tax Code.
To assign the taxation method:
  1. In the HCM Tax column for each row, click the drop-down list and select the appropriate taxation method for the earning.

    Note: You can filter the shown codes by selecting All Codes, Mapped Codes, and Unmapped Codes.

    Use the Search field to find a code shown on the page. To clear text in the Search field and reset the filter, click the Close button (Close button.).

  2. When you’re finished, click Next.
  3. Complete any additional taxation assignments.

    Note: All groups or underlying codes must be assigned a taxation method to continue.

To do the final tax-mapping review:
  1. On the Final Tax Mapping Review page, verify that the information is correct.

    If you selected “Drop Code From Wizard“ for any codes on the Tell us about your taxes page, the codes show on this page so you can verify that they’re correct.

  2. If you need to make changes, click Start Tax Mapping Over to return to the beginning of the tax-mapping workflow.
To install the tax code information in Dayforce:

When the tax information is complete in Activate, you must install it in Dayforce.

  1. When you’ve completed all pages, click Done

    The Load page shows a summarized list of the elements to be removed, installed, set up, moved, completed, and installed. The page includes an estimate of how long the installation usually takes to complete.

    During the installation, the current step in the process shows in bold text so you can monitor the progress.

  2. Click one of the following:
    • Add Email and enter your email address to receive an email when the installation process ends instead of waiting for it to finish.

      If any codes were categorized as “Dropped” during the workflow, the email includes a message stating that the codes were dropped from the Payroll Tax Codes wizard. If this action was done in error, use the Rollback Activate and Dayforce feature and correct them. A bulleted list of the codes that were categorized as “Dropped” follows the message.

      A bulleted list of codes categorized as “dropped” during the workflow immediately follows the paragraph

    • Next when the installation is complete.

    Activate Central opens with the wizard name now in green text and a green checkmark next to it. The day, date, and time of completion show, along with your name as the user who completed the wizard. The environment in which the installation was applied (Stage, Config, or Train) is also shown.

Results

Dayforce now contains a set of tax codes that mirror the wizard's installation.

Note: When the installation completes, you can download the Tax Mapping File, which is used as a basis for the YTD wizard. To download the file as an Excel spreadsheet:
1. Go to the User Menu (Person Icon).
2. Click Troubleshooting Resources.
3. Click Tax Mapping under Customer Mapping Templates.

Fields populated in Dayforce

For the configuration, the data uploaded from the Tax YTD Data template shows on the Dayforce (Payroll Setup > Earnings and Deductions > Deductions) page. When the data is loaded for Parallel and Go Live, this information shows on the DayforcePayrollpage Pay Run Management tab.

Fields populated in Dayforce
Field in Template Field in Dayforce
Payroll Identifier —
Pay Period End Date —
Employee Identifier —
First Name First Name
Last Name Last Name
Company ID Business Number
Tax Code  
Tax Description  
Tax Level  
Work Location Work Location
County  
Employer Tax  
Tax Amount  
Limited Taxable Wages Limited Taxable Wages
Total Taxable Wages Total Taxable Wages

PA Work PSD

 

PA Resident PSD

 

Local Tax Resident

 

Canada Previous RP Number

 

Next steps

When the payroll tax codes have been uploaded, the Year-to-Date Payroll Totals wizard is available for completion.

Complete the next wizard, as appropriate.

Drag and drop pages

Several of the Tax Question pages use Drag and Drop functionality. These pages are different from many of the table and question pages in the wizards, and a more direct hand is needed to set up the data correctly.

HCM Tax Match

Match existing tax codes with the most similar Dayforce HCM Tax. Review the Tax Code Description, if the tax is an Employer Tax or not, and select the most similar Dayforce code from the drop-down list. If you’re unsure which Tax Code best matches, click I couldn't find my tax.

This page also lets you know which category of Taxes you’re working with. For example, if you’re working in the US, it might show “USA Federal Taxes,” and only let you select from US Federal Taxes in the HCM system.

Note: You can’t change cell length. However, if the name of the Tax Code doesn’t fit in the cell, hover your mouse over the cell to get the full name.

Tax Categories

Drag and drop your existing tax codes to categorize them into the type of tax code they are. Each cell here shows the tax description in bold, and the tax name above it in gray text. It also lets you know if the tax is an Employee or Employer Tax.

Note: If you don’t see the correct category for your tax, you might have uploaded the file with the wrong value for Level. You can either upload a fresh file or fix the Level and categorization on the Final Tax Mapping Review page.

Final Tax Mapping Review

This page is a final review of all Tax Codes that are being imported into Activate.

  • If on any previous page you selected that you couldn’t find your tax, it shows here as an Unknown Tax. To complete this page, you must select a tax type. You can change its Level, State/Province Association, Employer Tax Status, County, and HCM tax.
  • If all taxes have been completed, you can review by selecting Show All Taxes. You can change a tax's Level, State/Province Association, Employer Tax Status, County, and HCM tax.

Next steps

Review the new Payroll Tax Codes in Dayforce and update as required after the installation from Activate.

The Year-to-Date Payroll Totals wizard is now available for completion.

Complete the next wizard, as appropriate.

Tax YTD Data template fields

All templates have the same basic structure:

  • Instructions tab: Helps you understand the purpose of the data and complete the fields in the template.
  • Data tab: Contains headers for the data to be included in the template. The headers remain the same, but you can change the column order. If you add more columns, Activate ignores them.

All number ranges in the templates include the numbers at both ends of the range.

To see a list of the fields in the template, click here:
Payroll Identifier (Required)
Order Data Type Description Examples Why This Is Needed
1 String1 between 1-64 characters.

 Use this field to identify a group of employees uniquely. It could be defined as “Company Number” in some previous payroll provider systems. It could be defined as “Salary Employees” or “Hourly Employees” if you segregate them into separate groups for Payroll Register purposes. It’s the identifier used to define the current payroll the employee is paid through. This is the grouping of employees paid at the same time who are reported together in the same payroll totals reports. B1234
Monthly
Executive Payroll
This data is used as part of the key to identify tax definitions uniquely. It serves to preserve definitions, which might have the same name or code but differing functionality between payrolls.

1 Special characters accepted within the string include: alphanumeric, space, period, apostrophe, dash, number symbol #, comma, underscore, forward slash /, parentheses (), &

Pay Period End Date (Required)
Order Data Type Description Examples Why This Is Needed
2 Date. Excel right-justified date format or Excel text format yyyy-mm-dd.
 The Pay Period End Date of the period for given YTD values. The Pay Period End Date being used should be the same date for each of the three YTD import files. Date formatted cells:
09/24/2015
24/09/2015

Text formatted cells:
2015-09-24

This required date identifies the period in your payroll calendar that represents the YTD values given on this import.
Employee Identifier (Required)
Order Data Type Description Examples Why This Is Needed
3 Alphanumeric.
Unique value between 1-40 characters.

For Canadian pay groups, a unique value between 1-9 characters.

This value enables the system to identify employees uniquely. You might want to use their employee number. It shouldn’t be your employee's Social Security number or Social Insurance Number. We’ll ask for that information later. 3241245
000000006
abc12349

In the context of this import the Employee Identifier, First Name, and Last Name are included for the purposes of helping users identify employees when completing the template.

This required field validates that the data being loaded is assigned to the correct employee record. The values given must match an existing employee record in Dayforce exactly.
First Name (Required)
Order Data Type Description Example Why This Is Needed

4

 String1 between 1-64 characters. The legal first name of the employee. Joe In the context of this import the Employee Identifier, First Name, and Last Name are included to help users identify employees when completing the template.

This required field validates that the data being loaded is assigned to the correct employee record. The values given must match an existing employee record in Dayforce exactly.

1 Special characters accepted within the string include: alphanumeric, space, period, apostrophe, dash, number symbol #, comma, underscore, forward slash /, parentheses (), &

Last Name (Required)
Order Data Type Description Example Why This Is Needed

5

 String1 between 1-64 characters.

 

 Legal last name of the employee. Smith In the context of this import the Employee Identifier, First Name, and Last Name are included to help users identify employees when completing the template.

This required field validates that the data being loaded is assigned to the correct employee record. The values provided must match an existing employee record in Dayforce exactly.

1 Special characters accepted within the string include: alphanumeric, space, period, apostrophe, dash, number symbol #, comma, underscore, forward slash /, parentheses (), &

Company ID (Required)
Order Data Type Description Examples Why This Is Needed
6 Numeric. Length
9-20.		 Give the Federal Employer Identification Number (FEIN) if the legal entity is in the US and the Business Number (BN) if the legal entity is in Canada. For the United Kingdom, enter the HMRC/PAYE number. 123456789
234/A1237634		 This data is required to assign the correct Legal Entity to the specific tax for tax reporting purposes.
Tax Code (Required)
Order Data Type Description Examples Why This Is Needed
7 String1 between 1-64 characters.

 The payroll system Tax Code as defined on the previous payroll provider's system. FED W/H This data is used to create a mapping between this particular tax and a corresponding HCM tax.

1 Special characters accepted within the string include: alphanumeric, space, period, apostrophe, dash, number symbol #, comma, underscore, forward slash /, parentheses (), &

Tax Description (Required)
Order Data Type Description Examples Why This Is Needed
8 String1 between 1-64 characters.

 The payroll system Tax Description as defined on the previous payroll provider's system. Federal Withholding This data is used to help identify the purpose of the existing legacy tax code.

1 Special characters accepted within the string include: alphanumeric, space, period, apostrophe, dash, number symbol #, comma, underscore, forward slash /, parentheses (), &

Tax Level (Required) (Doesn’t apply to the UK.)
Order Data Type Description Examples Why This Is Needed
9 String Accepted Values:
Canada Federal
US Federal
State
Provincial
Local		 Indicates if the tax is a Federal, State/Provincial, or Local tax. Canada
Federal Local		 This data is help narrow down the possible HCM tax options this tax code could be mapped to.
Work Location (Required)
Order Data Type Description Examples Why This Is Needed
10 Accepted Values:

For the US:
2-digit state identifier.

For CAN:
2-digit province identifier.

For the UK:
record “UK”

 The two letter state/province code of the state the employee worked in where the taxes were paid. If in the United Kingdom report as UK for all records.

State:
FL
IL

Province:
AB
ON

United Kingdom:
UK

 This data is required for the YTD data load files for tax reporting purposes. It’s possible for the employee to have values in multiple states or provinces, thus the requirement to identify the code for each line item.
County (US Only)
Order Data Type Description Examples Why This Is Needed
11 String1 between 1-64 characters The County associated with the Tax Code and Tax Description when a local tax. Sussex
Erie		 The County is used for US Local taxes to help determine the HCM tax options this tax code could be mapped to. The County provided must be an exact match found in Dayforce.

1 Special characters accepted within the string include: alphanumeric, space, period, apostrophe, dash, number symbol #, comma, underscore, forward slash /, parentheses (), &

Employer Tax (Required)
Order Data Type Description Examples Why This is Needed
12 String Accepted Values:Y
N 		Indicate whether this tax is to be paid by the employer instead of the employee. Y
N		 This data helps to narrow down the possible HCM tax options this tax code could be mapped to.
Tax Amount (Required)
Order Data Type Description Examples Why This Is Needed
13 Numeric. YTD Amount of the tax. 1234.56 This data is required for Quarterly and YTD Tax Reporting, and the correct calculation of tax on the following pay period.
Limited Taxable Wages (Required) (Doesn’t apply to the UK.)
Order Data Type Description Examples Why This Is Needed
14 Numeric

YTD Amount of Taxable Wages.

If the taxable wages exceed the limit for the particular tax, enter the limit value.

If no value is given, the lesser of the Total Taxable Wages or the Taxable Wages Limit is used.

 123456.78 This data is required for Quarterly and YTD Tax Reporting and for the correct calculation of tax on the following pay period. If the value isn’t available, Activate calculates this amount based on the Total Taxable Wages and any applicable wage limits.
Total Taxable Wages (Required)
Order Data Type Description Examples Why This Is Needed
15 Numeric. Total Amount of Taxable Wages for reporting. The amount above and beyond a Taxable Wage Limit amount. 123456.78 This data is required for Quarterly and YTD Tax reporting and the correct calculation of tax on the following pay period. For the US, this value is required for all tax records being imported. For Canada, if the value isn’t available, Activate calculates and populates with the Gross YTD Wages on your behalf.
PA Work PSD (US Only)
Order Data Type Description Examples Why This Is Needed
16 String 6 characters. For local Pennsylvania taxes, enter the appropriate 6-digit PSD code assigned to this Tax Authority. Leave this field blank for any tax that isn’t a Local Pennsylvania tax. 123456 This data is used to map PA Act-32 taxes to the appropriate HCM tax and to tax reporting requirements.
PA Resident PSD (US Only)
Order Data Type Description Examples Why This Is Needed
17 String 6 characters. (If available) For any local Pennsylvania taxes that report a Work PSD, provide the appropriate 6-digit PSD code associated with the PA Lived In location for the employee. For Pennsylvania taxes that aren’t local, or any other taxes in any other state/province, this field can be left blank. 054766 This data is used for PA Act-32 tax filing to report the Resident PSD associated with the employee's primary residence at the time the work tax withholding was taken.
Local Tax Resident (US Only)
Order Data Type Description Examples Why This Is Needed
18 String Accepted Values:
Yes
No 		For local taxes, indicate if the employee was considered a Resident for that tax when taken. For taxes that aren’t local, or any other taxes in any other state/province, this field can be left blank. Yes
No		 This data is used to map local taxes to the appropriate HCM tax code in addition to tax reporting requirements.
Canada Previous RP Number (Canada only)
Order Data Type Description Examples Why This Is Needed
19 String1 4 characters.
 If a different RP Number was used earlier in the tax year or the employee has an RP Number other than the legal entity default, this field is required for YTD reporting. If there has been no change or the employee is assigned the legal entity default rate, it can be left blank. 0001


Required for Canadian Tax Remittance YTD when a different RP Number or EI Rate Group was used earlier in the year. If left blank, the current RP Number is used.

1 Special characters accepted within the string include: alphanumeric, space, period, apostrophe, dash, number symbol #, comma, underscore, forward slash /, parentheses (), &

Commonly encountered issues

Before you upload the template, make sure that the data doesn’t have any errors. Some common problems include:

  • Missing required fields or data.
  • Trying to upload an old/previously downloaded template file.
  • The Tax YTD Data tab is missing in the Excel spreadsheet.
  • Incorrect formatting.
  • If the file includes a filter, it might result in an error.

If a column has an error that you can't resolve, do the following to convert the data in the column back to text. This action might resolve the problem if the information was formatted incorrectly.
1. Click the letter at the top of the column.
2. In the menu, select Data and Text to Columns.
3. Click Next, Next, and Finish.