Tiered rates example

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Product support for the Creative Solutions Accounting platform ended on September 30, 2020.

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When setting up local tax tables, you have the option to change the calculation basis for the tax table from annualized earnings to year-to-date earnings.

When the Tiered rates checkbox is marked in the Tax Local Tax Tables dialog, the columns available in the Tax table grid are modified to reflect the change in the calculation basis. Rather than basing withholding amounts based on employees' annualized wages, you can base those amounts on the year-to-date earnings.

The YTD Wages Over column begins at $0.00 because the first row represents the zero bracket. The amount you enter in the But Not More Than column becomes the beginning of the next bracket in the following row. In the Percent of Wages column, enter the percentage amount of tax to be withheld for that bracket.

For example, the withholding rate is 0.7% for the first $25,000.00 in wages, and 0.1% for wages over $25,000.00 up to $84,900.00. This grid allows you to enter those amounts and have the application change the tax calculation automatically when the employee changes brackets.

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