Payroll Withholdings & Tax Formulas Overview

Formulas determine how much to withhold from each paycheck for things like income tax, social security, medicare, health insurance, retirement plans and so forth.

Note: the Payroll module does not support automatic calculation of nonresident alien withholding adjustments; however, you may still choose to withhold extra. See: How to Withhold Extra Income Tax.

Withholdings Overview

There are many different kinds of withholdings, such as federal, state, local, child care, health and retirement. Each uses a Payroll Formula to calculate the proper amount to withhold from an employee. You may want to download formulas, create or edit your own formulas, mark items as tax exempt, etc.

Federal & State Withholdings

Federal withholdings include income tax, Social Security and Medicare. State withholdings include income tax only. Other types of state, county and city specific withholdings, such as California SDI, worker’s compensation, state disability, etc. are considered General Withholdings.

• First Time Download of Federal & State Tax Formulas
• Update Federal & State Tax Formulas for the New Year
• Frequent Questions about Federal/State Withholdings

Other common “General” Withholdings (local taxes, health, retirement, etc.)

Anything that is not a standard federal or state withholding is known in Procare as a General Withholding. General withholdings include things like health, medical or dental insurance, employee child care, retirement plans, garnishments, California SDI, city income tax, etc.

* Download & Import Common “General” Formulas

• Create a New Withholding Formula
• Edit, Change or Update an Existing Withholding Formula
• Mark a Withholding as Pre-Taxed/Exempt from Certain Taxes
• Export a Withholding Formula (rare, used to move a formula from one Procare installation to another)

Unemployment (FUTA & SUTA)

In most states unemployment taxes are paid by the employer only and are not withheld from employee checks. Since these rates can vary from one business to the next, you must manually enter and update them. Technically, these do not use Procare formulas and are set up in a different area.

• Set Up FUTA & SUTA (federal & state unemployment)
• Does Procare Update FUTA & SUTA?

Payroll Withholding Reports

There are several useful reports that show withholdings. Go to Reports > Standard Reports > Payroll.

• Simple Withholdings Summary: Located under the Company Summary section, this report gives a summary off all employees on one page. General Withholdings are lumped together in one column.
• Employee Earning / Withholding Summary: Located under the Employee Summary section, this report shows detail of both taxable earnings and amounts withheld with each employee on a separate page. General Withholdings are broken out individually.
• Withholding Box Summary: Also located under the Employee Summary section, this report shows not amounts withheld, but which withholdings are assigned to each person as well as filing status (single/married), allowances claimed and other variables.

Employee W2s

Optional W2/1099 software is available each year to gather data from Procare and print the information on standard, pre-printed W2 and 1099 forms, as well as Efile for federal forms. See: IRS Forms and Publications.