Last modified by: Leanne Kalynuk -
Employees are set up with the basic tax exemption amounts by default. Any employees who want additional tax deducted from their pay need to fill out a TD1 form and provide their employer with the completed copy.
Additional tax amounts are added to the amount calculated by the system.
To set this up in Everest, go to the Employee profile (How do I do this?)
Click on the Tax tab, and then on the link named Add Personal Federal Tax Configuration.
*If a personal federal tax configuration already exists for the current year, click Edit on that row.
Additional Tax can be entered either as a dollar amount or a percentage to be deducted.
|Fixed Dollar Amount||Percentage|
|Select "Fixed Dollar Amount" from the drop down||Select "Percent of Taxable Income" from the drop down.|
|Enter dollar amount of additional tax to be deducted. i.e. enter 75.00 for $75.00.||Enter amount of additional tax to be deducted. i.e. enter 20.00 for 20%.|
Important Notes about adding additional tax:
- By default all employees receive the basic claim amount. If an employee has more than one job they should only claim the basic exemption at one job (usually the one with the higher earnings). If an employee is asking for extra tax to be taken off it may be because they are working multiple jobs and have ended up owing taxes in the past. In this case rather than an additional tax amount it would be best for them to fill out a new TD1 at the job with the lower income to indicate that they have more than one employer. Once this is complete then you would remove the basic claim amount from their profile rather than adding additional tax.
- Negative pays - when a fixed dollar amount option is selected that amount of tax will be deducted regardless of whether there are any earnings for that employee. In this case if the employee is not being paid on a given pay run, they should be removed from the input sheet to avoid having funds withdrawn from their account.