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Tax Reconcile function calculates the amount of withheld tax currently due based on all Taxable Income earned to date.  The function should be used in the following situations.

YEAR-END TAX 

If the payroll is the final issued for the year, select "Final Year Payslip" when creating the batch to automatically run a full year tax reconciliation for every payslip.

A Tax Reconcile figure will automatically be calculated for every payslip, which is the amount of tax that should be added or refunded to reflect total Tax Payable for the year.

Tax Reconcile Calculation

1. Taxable Income - total all taxable income within the year
2. Total Tax Due - calculated based on Taxable Income above
3. Tax Paid - total all tax already withheld within the year
4. Tax Reconcile - Total Tax Due - Tax Paid 

Use the Fiscal Year Summary feature to view details on all Taxable Income and Tax Payable reported within the year.  

The Tax Reconcile figure will automatically be included in your regulatory year end tax filings.

TAX UPON TERMINATION 

If the payslip has been marked as a Termination Payslip, the Tax Reconcile function will also be automatically activated so that total tax upon Termination Date will be calculated.

PERIOD TAX RECONCILE 

Reconcile tax to current date based on best estimate of tax due to date. 

As month-to-month tax calculations are estimates based on projected full year taxable income at the time, the total tax payable withheld to date may be significantly different from the best estimate of current tax due.  

Tax Reconcile will adjust tax payable to the best estimate to date, so that you can minimize potentially larger adjustments at a later date.     

• Upon calculating the batch, click the <Reconcile Tax> to automatically calculate year-to-date tax;
• Click the <RECONCILE> button in the Taxes section of any payslip; or
• Use the <Bulk Tax Reconcile> feature found on Payroll >More Menu 

Period Tax Reconcile Calculation

1. Taxable Income - total all taxable income earned within the year-to-date
2. Taxable Months - calculate months employed in current tax year
3. Annualized Taxable Income - Taxable Income * 12 / Taxable Months  
4. Annual Tax Due - calculated based on Annualized Taxable Income 
5. Tax Due to Date - Annual Tax Due / 12 * Taxable Months
6. Tax Paid - total all tax already withheld within the year
7. Tax Reconcile - Tax Due to Date - Tax Paid 

PREVIOUS EMPLOYER 

If the Employee was employed by a different employer in the current tax year, the taxable income and tax paid from Previous Employer needs to be considered in the Tax Reconcile calculation.

>>My Profile >Employment Info> Payroll > Previous Employer

• Period of Employment - if employee left Previous Employer in the current tax year, the following values will be used in Tax Reconcile
• Net Income in Year of Separation - Net Income ("Taxable Income") 
• Tax Withheld in Year of Separation - Tax Paid

Click here to learn more on how you can upload previous employer data in bulk.