Tax authority

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

You define a tax authority for federal taxes and for each of the states, provinces, and localities in which Payroll calculates taxes for your organization.

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. You only need one tax authority for New Jersey for the tax engine to calculate the appropriate taxes.

You must tie each tax authority to the appropriate tax code that you set up in the tax engine. For more information on setting up tax codes, see the Infor Integration: BSI TaxFactory Manual.

When you create a tax deduction, you must specify the appropriate tax authority and tax category to direct Payroll to the appropriate tax table in the tax engine.

When you define a tax authority, you can also define a minimum wage for federal and for each state or province. In the United States, Payroll uses the appropriate minimum wage in the calculation of FLSA overtime, tip credit, and income protected from garnishment. During overtime calculation, if the employee's regular rate is less than either the federal or state minimum wage, Payroll replaces the regular rate with the greater minimum wage.