Each “general” withholding you create for things like health insurance, retirement plans, employee child care and local taxes requires a Payroll Formula to determine the amount to withhold. This article explains how to use variables and the syntax for entering the formula. You may also Download & Import pre-made general withholdings rather than creating them from scratch.

Getting There

Follow the steps to create a new withholding in the Payroll Formulas article. Then use the examples below as ideas for how the formula may be written using the Payroll Formula Builder. You may also be interested in an explanation of preset Variables & Functions.

Formula Examples

Once the formula is set up be sure to assign any variables (like an amount or percentage) to the Employee Withholdings screen of each person.

Example 1: Withhold a Flat Amount
This is often useful for items like health insurance that have a set amount to withhold per paycheck. The amount can be different for each employee.

You’ll use a single variable.
variable-health-plan

The formula just references the variable.
formula-health-plan
Example 2: Withhold a Percentage or Amount
For something like a retirement plan an employee may elect to have a percentage of their gross pay withheld or a fixed amount per check.

You’ll use two variables. Select the “Money” or “Percent” Mask as appropriate.
variable-retire

The formula could then choose whichever would withhold more (the percentage or the fixed amount).
formula-retire

Example 3: Wage Base
Some withholdings, including things like SDI (state disability insurance), may require a wage base. This means the amount is withheld up to a certain level of earnings for the year (the wage base) and once a person had earned more than that the withholding no longer applies.

You may not need any new variables, instead you’ll use built-in variables like (gross) and functions like YTD[gross]. Often, this type of withholding a fixed percentage built into the formula. Once a person exceeds the wage base no more is withheld.
formula-wage-base