Skip to main content
Documentation
Documentation
Administrator Guide
Last Updated: 2024-01-12
Set Up Company State Taxes (USA)

Set Up Company State Taxes (USA)

Security:
Set Up: Payroll - Company Specific (Taxes) - USA
 domain in USA Payroll functional area.
Workday maintains state tax data for payroll tax processing. You can enter company-specific data to set up, update, or override company state taxes. You can also override default state tax rates such as SUI, when a state doesn't mandate the same rate for all employers. To view default tax rates, access the
View Payroll Tax/Allowance Data
 report.
  1. Access the
    Edit Company State and Local US Tax Reporting
     task.
  2. For all sections you complete on the
    State
     tab:
    • If you're entering a tax for the first time, enter the
      Start Date
      .
    • Workday recommends that you enter an
      End Date
      , then add a row with a new
      Start Date
      when you change tax information.
    • When you add a row, Workday copies information from the previous row. Enter the
      Start Date
       and the changes in the new row.
    As you complete the
    State
     tab, consider:
    Section
    Description
    Withholding
     (Only displays if the state that you selected requires withholding.)
    Select the state tax method to apply to supplemental payments such as bonuses:
    • Supplemental Tax Method - Single Check:
       Select the tax method for supplemental payments paid on a run that uses regular taxation.
    • Supplemental Tax Method - Separate Check:
       Select the tax method for supplemental payments paid on a run using nonregular taxation.
    You can select the multistate rule method to apply to the resident state calculation when a worker's resident and work states are different and the states don’t have reciprocity.
    • Multistate Resident Rule - Calculate State: Select the rule to identify when the resident state always calculates (TRUE) or when the work state doesn’t have tax.
    • Multistate Resident Rule - Calculation Method: Select the rule to identify how the resident state calculates.
    Unemployment
    To override the default tax rate, select
    Use Employer Tax Override Rate
     and enter the new rate in the
    Employer Tax Override Rate
     field. Example: Enter
    3.4
     when the rate is 0.034%.
    Use Alternate Wage Limit
     applies to states that have 2 taxable wage limits for state unemployment calculations (beginning in 2012). Example: Rhode Island. To apply the alternative rate, select the check box. View both rates on the
    View Payroll Tax/Allowance Data
     report.
    FUI ER Credit Reduction
    You can override Workday-delivered
    Federal Unemployment Insurance (FUI) ER Credit Reduction
     tax rates. Select
    Use Employer Tax Override Rate
     and enter the new rate in the
    Employer Tax Override Rate
     field.
    When you select
    OK
    , the
    Default Employer Rate
     displays the tax rates from the
    All Payroll Tax Data
     report for all effective-dated rows.
    Other
    For taxes other than withholding or unemployment.
    When you select a tax, Workday automatically selects 1 of these check boxes:
    • Exemption Allowed
       : The tax is calculated unless you exempt the worker.
    • Worker Tax Election Required
      : The tax is calculated only if elected for a worker.
    Use the
    Add Worker US Tax Elections
     task to exempt a worker or make an election.
    When a tax rate override is allowed, you can select
    Use Tax Override Rate
    , and enter a
    Tax Override Rate
     to override the default. Convert a percentage to the rate.
    Example
    : Enter
    3.4
     when the rate is 0.034 percent. Enter
    0.34
     when the rate is 0.0034 percent.
    You can only enter a value on the
    Alternate Wage Limit
     field after selecting the
    Use Alternate Wage Limit
     check box for these deductions with a
    Start Date
     that is on or after 2024-01-01:
    • CA: Voluntary Disability Insurance (VDI) - Mandatory [USA]
    • CA: Voluntary Disability Insurance (VDI) - Optional [USA]
    Taxes in the
    Other
     category can be
    Excluded From Tax Filing
     unless you included them using the
    Maintain Payroll Tax Filing Configuration
     task.
    You can add or change the EIN. When you update the EIN, Workday displays a
    Box 15 – State – Employer's State ID Number (Previous)
     column on the
    View W-2C Form Data
     report that you can use to view the original EIN.
  3. As you complete the
    ESS Forms
     tab, consider:
    Section
    Description
    Start Date
    Select the date that you want these changes to go into effect.
    Enable All Forms
    You only need to select
    Enable All Forms
     if you previously disabled forms or form types. Example: You add a row with a start date of 01-01-2023 and select
    Exempt
     for the
    Disabled Form Types - All States
     prompt. You want to enable all forms for the next month, so you add another row with a start date of 02-01-2023 and select the check box. This enables you to keep an audit trail of what forms you disabled previously.
    Disable Forms - All States
    Select the forms that you want to hide from workers.
    Disabled Form Types - All States
    Select the form types that you want to hide from workers.
    Display Default Disclaimer
    Select to display the default disclaimer to workers when they add state withholding elections. Doesn't display when you enter a custom disclaimer.
    Custom Disclaimer
    Enter a custom disclaimer. The disclaimer displays to workers when they're adding state withholding elections. This disclaimer takes priority over the default disclaimer and displays even when you select the Display Default Disclaimer check box.
Review the
Company US Tax Reporting
 report for a summary of company elections, including a history of elections that have ended.
For the
Active As of Date
 field, Workday only returns the tax authorities as of the date you selected. Example: If you input 1/1/2021, you can only review company tax data that are in effect on the specified date or later.