User-Maintained Payroll Formulas

How Do I...

There are two sets of payroll formulas in Sage 50: Sage-maintained and user-maintained.

  • Sage-Maintained Payroll Formulas apply to all the companies you have set up in Sage 50. They include predefined formulas containing federal-, state-, and (some) local-regulated tax calculations maintained by one of the Sage Business Care plans. When you subscribe to Sage Business Care, you will receive tax updates periodically as dictated by changes in tax laws. Installing these updates overwrites any changes you may have made in Sage-Maintained Payroll Formulas.
  • User-Maintained Payroll Formulas are only used by the specific company for which they are set up. They do not get overwritten by tax updates, so this is where you would enter customized calculations for state unemployment rates, 401(k) contribution scenarios, special localities, vacation accruals, or anything not handled by your Sage Business Care plan.

You must subscribe to Sage Business Care to use and set up payroll formulas in Sage 50.

If you just installed Sage 50, most payroll taxes will not calculate automatically or accurately during payroll entry. To calculate these amounts within Sage 50and to stay current with regulatory changes, you should subscribe Sage Business Care and install the latest update.

If you subscribe to a Sage Business Care plan, your payroll taxes will be calculated based on your area, employee setup (filing status), and current tax laws.

To edit a user-maintained payroll formula

For the latest information about federal tax calculations, consult www.irs.gov. For the latest information about state or local taxes, contact your state or local tax authority.

  1. From the File menu, select Payroll Formulas, then User-Maintained. Sage 50 displays the User-Maintained Payroll Formulas window.
  2. Click the drop-down arrow beside the Formula ID field and select a formula. Enter changes based on the field information below.

  3. Select Save after making your changes.
  4. When finished, select Close.

The toolbar at the top of the window contains the following buttons: Close, New, Save, Delete, and Help.

Formula ID: If you plan to enter a new formula, enter an ID that is not already in the Formula list box. You should follow the naming conventions of Sage 50 and start the ID with the two-letter postal abbreviation for your state.

Name: The name you choose for your formula is important, because it allows Sage 50 to identify which payroll formula to use for a particular field. The name has two (and sometimes three) parts separated by a single space:

  • calculation name: this is the name of the tax or plan--for example, FICA or 401K
  • payee (for certain formula types): EE (employee pays) or ER (employer pays)
  • payroll tax year: this is the last two digits of the calendar year to which this tax formula applies

You can look at the sample company that comes with Sage 50 for examples.

Affect on gross pay: A formula can either add to or subtract from gross pay. Most taxes or benefits will subtract from gross pay. In some cases, the formula may either add or subtract from the gross in payroll calculations. Use " Either subtracts or adds..." for a vacation or sick time field to allow the calculation of a deduction to be positive, or the calculation of an addition to be negative.

Filing Status: If this calculation is to be used for all employees, regardless of Filing Status, select All Filing Statuses from the drop-down list. If you choose an alternate status, create multiple formulas with unique IDs for each possible filing status; make sure each formula ID and filing status variation uses the same tax name. See a list of valid state filing statuses for each US state.

How do you classify this formula?: You can select either a Tax (FICA, FUTA), a Deduction (Garnishment), a Benefit (Insurance, 401K), or Reimbursement (positive adjustment).

Tax Agency: You select the type of government this tax applies to by selecting one of the available options. If you select State or Local government, you must specify the state or locality to which the tax applies. For State, enter the two-character postal abbreviation; for locality, you can type in the name of the locality. You can indicate that this tax applies to all states or all localities.

Note: The state or locality specified for the government entered here must also be entered in State/Locality field of the Withholding Information table in the Maintain Employees/Sales Reps window.

Use this formula as a filter on the Payroll Tax report: Select this check box to have this calculation appear on the Payroll Tax Report menu or to have the payroll field that uses this calculation appear on the Exception Report. The Taxable_Gross variable must be included in the formula when selecting this check box.

Formula: The Formula box contains the equations you use to actually calculate taxes. If you subscribe to one of the Sage Business Care plans, Sage 50 supplies the equations for most types of taxes. If you are setting up your own tax calculations, get more detailed information on payroll formulas and functions.

Set Up Tax Brackets: This is only required if you have used the TABLE function of the tax formula. If your formula does not use the TABLE function, you do not need to set up tax brackets.

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