Question:

In the Earnings Setup (Taxes page), there are two check boxes "Subject to FWT" and "withhold FWT" under the US ONLY group box.could you please explain the significance between the two checkboxes? How does it affect the earning code?
Answer:



When you setup an Earning Code, you need to see if the earnings is taxable; If the Earning is taxable and taxes are to be withheld from Employee's paycheck, then you would need to select appropriate properties during an Earning Code Setup. Most of the earnings are defined with both Subject to FWT and Withhold FWT selected.



• Subject to FWT means the earnings is part of taxable gross.
• Withhold FWT means federal income tax on the earnings must be withheld at the time of payment.

If Subject to FWT is checked, but the Withhold FWT is NOT checked, it means that, the earnings are taxable, but when pay calculation is run, payroll will not take out taxes from that earnings;

If Federal tax is not withheld because Withhold FWT is not selected on the Earnings table and the State tax is not withheld because Withholding Follows Fed Rules is selected on the Taxable Gross Definition Table page..