Tax authorities

A tax authority creates the link between all tax deduction codes and the appropriate BSI tax code. This link tells BSI which tax tables to use to calculate the tax deduction.

Define a tax authority for federal taxes and for each of the states, provinces, and other local entities in which taxes is calculated for your organization.

Note: Do not create more than one tax authority for each tax jurisdiction in your organization. For example, do not define one tax authority for New Jersey state withholding and one tax authority for New Jersey unemployment. Only one tax authority is required for New Jersey for BSI to calculate the appropriate taxes.

You must tie each tax authority to the appropriate BSI tax code that you set up in the BSI software.

When you create a tax deduction, you must specify the appropriate tax authority and tax category. This directs Payroll to the appropriate tax table in BSI.

When you define a tax authority, you can also define a minimum wage for federal and for each state or province. In the US, HR Payroll uses the appropriate minimum wage in the calculation of Fair Labor Standards Act (FLSA) overtime and income protected from garnishment.