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ZipHR automates tax requirements according to your needs.
First, review your Tax Settings to confirm tax treatment and customize as required.
Expand the Tax window to see details.
Tax withheld for wages earned in the payroll period, if applicable in your country.
- Gross Income
- Total Wages - all taxable wages
- Taxable Other Payments - only those Other Payment Types set as taxable
- Taxable Contributions - any employer contributions that are considered taxable
- Deductible expenses - custom configurable expenses based on your country
- Deductible Contributions - any employee contributions that are tax-deductible
- Net Income = Gross Income - Deductions
- Estimated Net Annual Income = Estimated Net Monthly Income * Taxable Months
- Payment Cycle Multiple - how many times you get paid per month
- Estimated Net Monthly Income = Net Income * Payment Cycle Multiple
- Taxable Months - how many months you are expected to be employed over the year
- Estimated Annual Taxable Income = Estimated Net Annual Income - Non-taxable Income
- Non-taxable Income - non-taxable threshold amount of annual income
- Estimated Annualized Income Tax - automated tax calculation based on the Estimated Annual Taxable Income
- Income Tax = Estimated Annualized Income Tax / Taxable Months / Payment Cycle Multiple
Only tax for the payroll period is deducted
Tax for bonuses paid
- Taxable Bonus = Gross Bonus - Non-Taxable Bonus
- Gross Bonus - the sum of all bonuses paid within the year
- Non-Taxable Bonus - any non-taxable threshold for bonuses
- Bonus Tax - automated bonus tax calculation based on Taxable Bonus
Tax for separation payments at termination
- Taxable Severance Pay = Gross Severance Pay - Non-Taxable Severance Pay
- Gross Severance Pay - the sum of all severance paid within the year
- Non-Taxable Severance Pay - any non-taxable threshold for severance payments
- Severance Tax - automated bonus tax calculation based on Taxable Bonus
Tax for pension payments
- Taxable Pension = Gross Pension - Non-Taxable Pension
- Gross Pension - the sum of all pensions paid within the year
- Non-Taxable Pension - any non-taxable threshold for pension payments
- Pension Tax - automated tax calculation based on Taxable Pension
ZipHR can automatically reconcile all Taxable Income for the year-to-date and recalculate tax to make any adjustments required. Please see Tax Reconcile for details.
Use this function to make a manual tax adjustment for any special situations or historical adjustments.
TAX GROSS UP
If you pay the employee's taxes on their behalf, such amounts should be "Grossed-up" into taxable income. Please see Tax Gross-Up for details.