General Ledger Payroll Tax Provisions

Ready Pay's State Payroll Tax Function is used to calculate your state payroll tax liability.

Once configured, this liability can be picked up and exported to your accounting software as a provision.

Defining Your State Payroll Tax Liability

Ready Pay can keep track of the payroll tax liability for each state.

Liability for state payroll tax varies from state to state, but will generally include salaries, wages, allowances, commissions, bonuses and superannuation, among other things.

In addition, different payroll tax rates and thresholds apply in each state. Refer to the Revenue Office of the required state for more details.

Within Ready Pay, payroll tax is calculated as:

Total Wages liable for Payroll Tax

Monthly Threshold

Payroll Tax Rate

Payroll Tax Liability

Defining a Payroll Tax liability:

Edit the state via Navigator > Company Definitions > Maintain Company >States) and complete the Payroll Tax Definitions mandatory) for each state added.
Generally, employees who are apprentices are not liable for Payroll Tax.
However, at your discretion, these employees may be included in Payroll Tax Liability.
In the Employee Master File (via F3 Search) go to the Conditions of Employment tab and tick the option Inc. in Payroll Tax.
If you are including them, ensure you also select a State for Payroll Tax.

The Apprentice status is indicated on the Characteristics tab of the Employee Master File.

Account Details is an optional step. Enter bank account details for the recipient of the payroll tax.
These details will be the bank details for the relevant State Revenue Office.
On the Items tab select all pay items which are part of this state's liability for payroll tax.
This is fully customisable and it is your own responsibility to ensure that your selections comply with current legislation.
Check with the relevant State Revenue Office for more information.
Run a State Payroll Tax Report to calculate the payroll tax payable.
Using the Costing Structure, the report collates all wages which have been selected on the items tab (previous step), for the payrun periods you have selected for the report.
Two state payroll tax reports (one Detailed, one Summary) can be found in Report Explorer >System Reports > Historical > Taxation.

Apply a General Ledger code for State Payroll Tax

From the navigator exapnd the Company Definitions node.
Double click the Pay Items node to open the All Pay Items window.
From the list of All Pay Items, highlight Reserved Pay Items on the left.
On the right double click the pay item ZPT - State Payroll Tax - Reserved Use.
In the pop-up window select the General Ledgertab.
General Ledger codes for State Payroll Tax provisions are normally both debit and credit.
Complete the information below as required:

Field	Explanation
Post to General Ledger as:	The system will default to Both (Expense/Liability).
G/L Debit Code	To post the liability as a Debit item, enter the code here. G/L provisions will normally be posted as both a Debit and a Credit. If you are using a fixed general ledger code, enter the entire code. If you are using the G/L structure, enter only the portion of the G/L code which represents the pay item.
Use G/L Structure	Select if you will be using the G/L structure for this general ledger code. You will see the code reflected in the example of your current definition.
G/L Credit Code	To post the liability as a Credit item, enter the code here. G/L provisions will normally be posted as both a Debit and a Credit. If you are using a fixed general ledger code, enter the entire code. If you are using the G/L structure, enter only the portion of the G/L code which represents the pay item.
Use G/L Structure	Select if you will be using the G/L structure for this general ledger code. You will see the code reflected in the example of your current definition.
Define Structure	Click this if you need to define or modify the General Ledger Account Code Structure. Note that this structure applies to the entire general ledger function, not just leave provisions.