Labor Tax or Union Dues

Related topics

Set up the labor tax

Set up other payroll deductions

Set up an employee

Perform other payroll tasks

Read the employee defaults overview

Read the payroll setup overview

In some cases you may have to set up an employee deduction that calculates the total hours worked and multiplies it by a specified dollar rate or percentage. Common occurrences of this are labor and industry taxes, workers compensation taxes, and union dues. Typically employees are required to pay an amount equal to their hours worked multiplied by a designated rate. The Washington Industrial Insurance Tax is a good example of this type of payroll deduction.

Washington Industrial Insurance Tax

The Washington Industrial Insurance Act provides for three funds to be maintained for the benefit of employees working in the state of Washington. The three funds are the Accident Fund, the Medical Aid Fund, and the Supplemental Pension Fund. The Department of Labor and Industries periodically sends each employer a rate notice that specifies the employer and employee contribution rates for these funds.

Note: The Sage 50 labor tax example demonstrates one method for using the Special 1 or Special 2 payroll fields within the Withholding Information table of the Maintain Employees/Sales Reps window.

Use this example to set up similar employee deductions that your company may need.

There are three steps to this procedure:

  1. Set up the labor payroll formulas.
  2. Set up the employee labor payroll field.
  3. Apply the appropriate labor formula to each employee's setup.

Note: You must subscribe to a plan that includes payroll for payroll taxes and deductions to be calculated within Sage 50.