Location/Department allocation of payroll items and taxes

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Change to CS Support service hours

Our Support department is closed on Friday, April 28th for a company event. However, limited Accounting CS phone support is available on that date from 9 AM - 5 PM ET due to the approaching deadline for quarterly payroll tax forms.

Links to our most popular payroll tax processing topics are available in the Alerts and notices section on the right side of most pages.

This topic explains how the application automatically allocates payroll item, employer contribution, and tax amounts to an employee's location and department. Allocations for a client can be viewed in the Payroll Department Summary report.

Automatic allocations can be overridden during payroll check entry in the Distributions dialog.

Payroll item amount allocations

Deduction and employer contribution payroll item amounts are automatically allocated proportionately to an employee's location and department based on the proportion of the pay amount.


An employee works in two departments within the same location in Michigan, 60% of the time in Ann Arbor-Production and 40% of the time in Dexter-Sales. The employee's payroll check for $1,000.00 therefore has two distributions, as follows.

  • The payroll item amount is distributed $600.00 to Ann Arbor-Production and $400.00 to Dexter-Sales.
  • A deduction item calculated at $100.00 is automatically allocated such that 60% goes to Ann Arbor-Production and 40% goes to Dexter-Sales.

Tax amount allocations

Subject wage and tax amounts are automatically allocated proportionately to an employee's location and department based on the proportion of the gross subject wage amount. This ensures that if a limit is reached, the taxes are still allocated in an appropriate way.


An employee earns $6,000.00 in the Ann Arbor-Production department and $4,000.00 in the Dexter-Sales department. When calculating the Michigan SUI tax, the application does the following.

  • Takes the combined amount of $10,000.00 and applies it to the Michigan SUI limit of $9,000.00
  • Calculates the Michigan SUI tax ($9,000.00 x experience rate of 2%) at $180.00.
  • Allocates the subject wages ($9,000.00) and tax amount ($180.00) based on the proportion of gross taxable wage amount earned in each distribution, which, in this case, is 60/40.

Therefore, the allocations for each department are:

  • Ann Arbor-Production: Subject wages - $5,400.00. Tax - $108.00
  • Ann Arbor-Sales: Subject wages - $3,600.00. Tax - $72.00

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