BSI TaxLocator

How are tax deductions set up for United States employees?

Under four circumstances, BSI TaxLocator will attach or change tax deductions for employees:

• When you add a U.S. employee

• When you change the address or work location on a U.S. employee record

• When you change the address of a work location attached to U.S. employees

• When you enter a time record with a work location different from the one on the employee record for a U.S. employee

Which employees does BSI TaxLocator apply to?

BSI TaxLocator applies to an employee when:

• Employee Work Country is U.S.

• Employee Pay Status is PB or PN

• The company is assigned a Tax company

How does TaxLocator know which tax deductions to attach to an employee?

TaxLocator uses the home address and location (work address) from the employee record to determine which taxes to apply to an employee.

The home address tells TaxLocator where an employee lives (the Live State). You select whether TaxLocator uses the home address or supplemental address as the live address when you set up the Human Resources (HR) company. You can only specify a county on the home address. Regardless of how the company is set up, TaxLocator uses the county from the home address to determine taxes.

The location tells TaxLocator where an employee works (the Work State).

Because the correct tax deductions for an employee are determined by their home and work address, you must spell city names, state names, and county names correctly for home and work addresses.

How does TaxLocator know which Lawson deduction codes to use?

All applicable tax deduction codes must be established in Lawson before TaxLocator will be able to attach the codes to the employee record. Setting up deduction structure

Payroll allows multiple identical iterations of deduction codes. A specific iteration of a code consists of:

• Tax authority

• Tax Category

• Tax Formula

A warning message will display to warn the user of the duplication. When multiple iterations of a tax code exist and TaxLocator assigns deductions to the employee, the first deduction code found (alpha-numeric) is the code assigned to the employee. If this is not the correct iteration of the code for the employee, override the assignment on U.S. Tax Locations by disabling the incorrect iteration of the code and setting up the correct one.

When the client has no legal requirement to withhold a tax for which TaxLocator returns a "find", You will need to establish a "dummy" deduction on Deduction. Allow TaxLocator to attach the dummy code to the employee and then disable the deduction for the employee. When you do not disable the deduction, you will continue to receive a TaxLocator message when the tax jurisdiction is returned for an employee. The message informs you that the deduction is not set up for the tax authority. Tax authorities from U.S. Tax Authority should not be duplicated.

Triggers to call TaxLocator are as follows:

• Change to Employee Address fields (Addr1, Addr2, City, County, State, Zip)

• Change of Location Code

• Removal of a Termination Date

• Change of Pay Status

• Change of Railroad Code

• Assignment to Work Country is U.S.

However, in performing Mass Actions, only a change to the Location code calls TaxLocator.

Taxes returned by TaxLocator are those legally in effect as of the date the transaction is processed (the system date) or are created with a start date equal to the system date.

For this reason, you must make future dated changes to an employee's home address or location code using Personnel Actions, not directly on the Employee. Changes to the employee record on Employee that trigger TaxLocator deductions that are ended by TaxLocator are ended with a date of one day prior to the system date. TaxLocator will only add (not end) deductions as a result of a different location code on the employee's time record.