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Administrator Guide
Last Updated: 2025-09-19
Add Worker Local Tax Elections (USA)

Add Worker Local Tax Elections (USA)

Verify this employee data:
  • Company.
  • Pay group.
  • Valid work and primary home address in the U.S.
Security:
Worker Data: Payroll (Company Specific) - USA
 domain in the USA Payroll functional area.
You can enter local tax elections for a worker when they:
  • Submit local withholding elections using a paper form instead of using employee self-service.
  • Work in more than 1 company so you must enter a separate set of tax elections for each company.
Workday displays these tax authorities for the domicile state when you select the
MSRR Exempt
 check box on the
State
 tab:
  • City
  • County
  • School District
For Indiana, resident and work counties are determined at the beginning of the calendar year. Set the tax election
Start Date
 for an Indiana county to the first day of the year (January 1) in which the tax becomes effective for the worker.
These web services support loading and retrieving state and local tax elections:
  • Get Payroll USA State and Local Tax Elections
  • Put Payroll USA State and Local Tax Election
  1. Access the
    Add Worker US Tax Elections
     task.
  2. On the task prompt, consider:
    Option Description
    Effective Date
    For Indiana, Workday only calculates county tax when the effective date of the worker's county tax election is the first of the year.
    Company
    Displays the employee's company as of the
    Effective Date
    .
    Select the company as of the
    Effective Date
     when the employee:
    • Has a future hire date.
    • Is terminated.
    • Has positions in multiple companies.
    Work State
    Displays the state from the employee's primary work address when it exists, or the location of the primary or processing position.
    Home State
    Displays the state from the employee's primary home address.
    Additional States
    Select additional states in which the employee works.
    Your selections apply to taxes calculated for payroll input when:
    • You select the tax authority worktag for the additional state or its localities on payroll input.
    • Workers have ongoing multiple work jurisdictions specified on the
      Tax Allocations
       tab.
    • MSRR Exempt
       (Military Spouse Residency Relief Act) employees. Select the domicile state where the employee pays taxes.
  3. As you complete the
    Local
     tab, consider:
    These sections display in the
    Local
     tab depending on the worker's home and work states:
    • Home
      • City Withholding
      • School District Withholding
    • Work
      • City Withholding
      • County Withholding
    Option Description
    Withholding
    Select the local tax authority.
    Exemptions
    Select to exempt the worker from the tax.
    Additional Amount
    For these localities, Workday calculates additional local withholding on regular on-cycle payments unless it’s supplemental pay only:
    • Indiana, for Work or Residence county.
    • Michigan, for Work or Residence city.
    • New York, for Work or Residence city.
    For nonregular run categories, Workday doesn't deduct additional amounts. You can include the
    Additional Amount
     pay component related calculation (PCRC) in your deduction. Example: A worker received a bonus payment in an on-cycle, nonregular run category. You want Workday to withhold an additional amount, so you add the
    Additional Amount
     PCRC to the
    Federal Withholding [USA]
     deduction.
    Workday displays the
    Additional Amount
     elected on the payroll administrator view of pay results, but it might not reflect the total amount withheld due to net pay validation.
    For on-demand additional payments paid in regular run categories, Workday deducts when:
    • You select the
      Take Additional Tax Withholding Amounts
       check box.
    • You enter input for the
      Additional Amount
       PCRC.
    Inactive
    Select to stop calculating the tax for a worker, such as when they move out of the locality.
  4. Consider this additional location-specific tax withholding information:
    Option Description
    Kentucky
    For Louisville
    City Withholding
    , when the worker already has an election for
    Transit Authority of River City (TARC) (Kentucky)
    , select
    Inactive
     for it.
    Add a new row and select the
    Effective Date
    .
    Select 1 of these tax authorities from the
    City
     prompt:
    • Louisville Non-Resident + TARC (Kentucky: Jefferson)
    • Louisville Resident + TARC (Kentucky: Jefferson)
    For residents of Jefferson county, in the
    School District Withholding
     section, from the
    School District Withholding
     prompt, select
    Jefferson County School Board Tax (Kentucky: Jefferson)
    .
    Maryland
    If you don't enter instructions for local tax withholding, Workday uses the default withholding rate for Maryland.
    On pay results and payslips, Workday combines state and local (county) tax withholding.
    Pennsylvania
    To apply wages earned in another state to the work location for local taxation, select the
    Primary PA EIT
     check box in the
    Work
     section.
    Workday recognizes amounts previously withheld by other companies when:
    • You set up the
      Local City (PENN) Local Service Tax [LST] (USA)
       city withholding tax, and
    • Workers have transferred from or work in multiple companies.
  5. On the
    Tax Allocations
     tab, for employees who work in multiple tax jurisdictions on an ongoing basis, enter the percentage of work performed in each jurisdiction. Taxes elected here but not listed on the
    Tax Allocations
     tab calculate under certain conditions.
  • You can view local tax withholding information for an employee on the
    Worker US Tax Elections
     report.
  • When an employee changes companies, enter their tax elections for the new company.