Monday, January 30, 2012

How to Verify Microsoft Dynamics GP is calculating Payroll taxes correctly

855655 Federal Tax Calculation - Steps of how Microsoft Dynamics GP annualizes its payroll calculation of taxes

Because Microsoft Dynamics GP annualizes its taxes, what drives the calculation is the pay period or the frequency fields on your pay codes, benefits, and deductions.

Common Misconceptions:
  • The pay code pay period field set to weekly, as they have a weekly payroll, but the deduction will be set to monthly as it is only taken out once a month. **The frequency field on a deduction/benefit does not control when the deduction is taken, but instead the tax calculation of that deduction.
  • "I am paying a bonus and hardly any taxes are getting taken." If you look at the pay period of the bonus, it is annual, as it is an annual bonus, not realizing this affects tax calculation.
CLICK HERE to check out a free tool that allows you to do what if scenarios and verify if Microsoft Dynamics GP taxes are really correct!

Compliments of the Dynamics GP Support Blog