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Microsoft Dynamics GP (Archived)

Local Tax Calculation on Tipped Employees

Posted on by 1,817

I have multiple Restaurant Clients that have the issue described below. I have contacted MBS Professional Services and other vendors about a modification but it seems no one wants to touch it. The situation is:

Client owns a chain of full service restaurants. Servers are tipped employees and earn most if not all of their take home pay from tips. Their hourly wage generally only covers taxes and any other deductions that employee might be eligible for. The Microsoft Dynamics GP application takes out taxes in the following order:

1.

FICA (Social Security and Medicare)

2. Federal Withholdings

3.

State Withholdings

4.

Local Withholdings.

The Federal and State tax calculations are both “Table” based while FICA and most Local taxes are “Percentage” based. The problem that my client, and other restaurant customers that I work with have, is that many of the Local Taxing authorities require the companies to pay the taxes whether they are withheld from the employees or not. This can be a large tax burden on these companies.

My customer would like the ability to change the order of the taxes being calculated and withheld to the following:

1.

FICA (Social Security and Medicare)

2.

Local Withholding

3.

Federal Withholding

4.

State Withholding.

Does anyone out there have a work around for this issue.

Any help will be appreciated.

David

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