Table of Contents
Overview #
This knowledge base article provides guidance on setting up employer tax information in ProPay, specifically focusing on State Disability Insurance (SDI), State Unemployment Insurance (SUI), and Federal Unemployment Tax Act (FUTA) taxes. It also covers related settings for tip calculations, tax deferrals, and employer classification.
Table of Contents #
- SDI Tax Settings
- SUI and FUTA Tax Settings
- Tip Calculations
- Tax Deferrals
- Employer Classification
- Vacation and Sick Accruals
- Troubleshooting
SDI Tax Settings #
Employer SDI Exemption #
- Purpose: To indicate if an employer is exempt from SDI taxes.
- How to use: Check the box labeled “Check If Employer Is Exempt From SDI” if applicable.
- Note: This only applies to states that are automatically subject to SDI taxes.
Employer SDI Contribution Rate #
- Purpose: To set the employer’s SDI contribution rate.
- How to use: Enter the rate in the “Employer SDI Contribution Rate” field.
- Note: If employees are subject to SDI tax but the employer is exempt, enter a negative rate.
SDI Payment Hold #
- Purpose: To prevent ProPay from printing checks for SDI taxes.
- How to use: Check the box labeled “Check Here To Hold SDI Payments” if applicable.
- When to use: For self-insured employers or those with alternative SDI coverage arrangements.
Employer Pays Employee’s SDI Tax #
- Purpose: To indicate if the employer pays the employee’s portion of SDI tax.
- How to use: Check the box labeled “Check if Employer pays Employee’s SDI Tax” if applicable.
- Effect: ProPay will not deduct SDI taxes from employees but will accrue the liability for the employer.
SDI Tax Deposit Frequency #
- Purpose: To set how often ProPay generates checks for SDI taxes.
- How to use: Select either (M)onthly or (Q)uarterly in the “SDI Tax Deposit Frequency” field.
SUI and FUTA Tax Settings #
Employer SUI and FUTA Exemption #
- Purpose: To indicate if an employer is exempt from unemployment taxes.
- How to use: Check the box labeled “Check If Employer Is Exempt From SUI and FUTA Taxes” if applicable.
- Effect: All employees under this employer will be automatically exempt.
Tip Calculations #
Tips Against Minimum Wage #
- Purpose: To ensure tipped employees meet federal minimum wage requirements.
- How to use: Check the box labeled “Check Here To Apply Tips Against Minimum Wage” if applicable.
- Effect: ProPay will warn you when a tipped employee’s gross pay falls below the federal minimum wage and offer to adjust the pay rate for that paycheck.
Tax Deferrals #
FICA Tax Deferral (COVID-19 CARES Act) #
- Purpose: To indicate if employer FICA tax is deferred due to the COVID-19 CARES Act.
- How to use: Check the box labeled “Check Here if Employer FICA Tax is deferred due to COVID-1- CARES ACT” if applicable.
- For more information: Visit the IRS website
Employer Classification #
943 Employer (Agricultural Employees) #
- Purpose: To indicate if the employer files Form 943 for agricultural employees.
- How to use: Check the box labeled “943 Employer” if applicable.
- Note: Check the IRS website to see if your client qualifies.
944 Employer (Annual Return) #
- Purpose: To indicate if the employer files Form 944 (Annual Return).
- How to use: Check the box labeled “944 Employer” if applicable.
- Note: Check the IRS website to see if your client qualifies.
Household Employer #
- Purpose: To indicate if the employer is a household employer.
- How to use: Check the box labeled “Household Employer” if applicable.
- Note: Check the IRS website to see if your client qualifies.
941 Employer (Default) #
- Note: If none of the above boxes are checked, the employer is automatically classified as a 941 Employer.
Vacation and Sick Accruals #
Setting Default Accruals #
- Location: Employer Set-up Page-3
- Recommendation: Set up company default values for vacation and sick accruals when creating a new employer.
- Purpose: To speed up the setup process for new employees.
Recalculating Accrued Hours #
- How to use: Click the “Recalculate Vacation and Sick Accrued hours” button.
- When to use: After changes in accrual rates or when there’s a need to recalculate from the beginning of the year.
Troubleshooting #
If you encounter issues or have questions while setting up employer tax information:
- Consult the ProPay help menu within the software.
- Visit the Paysoft website for additional resources.
- Contact Paysoft customer support for personalized assistance.
Feedback #
We value your input! If you have suggestions for improving this knowledge base article or encounter any issues, please contact our support team through the ProPay software or via our website.