Taxes

If your business operates in the United States, you are required to withhold federal, state, and local taxes from your employees’ wages. Your organization must also contribute to employer taxes such as Social Security, Medicare, and State Unemployment Insurance. These amounts must be reported and paid to the appropriate government agencies.

With Zoho Payroll, you can efficiently manage these taxes in the Taxes section under Settings. This section allows you to:

1. Configure Tax Information
2. Authorize Tax Reporting Agent
3. Update Tax Information

Configure Tax Information

Configuring your tax information in Zoho Payroll helps:

• Calculate federal, state, and local taxes
• Determine the taxes to be withheld from employee wages
• Generate federal, state, and local tax forms
• Identify your deposit schedule

In the Taxes section, you can configure the following:

• Federal Tax Information
• State Tax Information

Federal Tax Information

The Federal Tax Information section helps Zoho Payroll calculate your federal tax liabilities, determine your deposit schedules, and generate IRS-compliant forms.

To configure federal taxes:

1. Go to Settings and click Taxes.
2. Click Configure under Federal Tax Information.

3. Provide the required details:

4. Click Save.

Your federal tax setup is now complete. Zoho Payroll will use this information to calculate and report your federal payroll taxes.

State Tax Information

The State Tax Information section helps Zoho Payroll determine your state tax liabilities, deposit schedules, and generate state-specific forms.

When you add a work location (via Settings > Work Locations) for a new state, you’ll need to configure that state’s tax information here.

To conifgure state taxes:

1. Go to Settings and click Taxes.
2. Click Configure under State Tax Information.

3. Enter the required details, which may vary depending on your state’s requirements.
4. Click Save.

Zoho Payroll will now calculate applicable state taxes and generate the corresponding forms for this state. The state tax setup will be complete once you configure tax information for all available states.

Authorize Tax Reporting Agent

After configuring tax information, you or someone with authority in your organization must authorize Zoho Payroll as your tax reporting agent. This allows Zoho Payroll to file taxes and submit forms on your behalf.

To authorize your tax reporting agent:

1. Go to Settings and click Taxes.
2. Click Authorize.
3. In the popup that appears, confirm that you have the authority to authorize and click Proceed.
4. For each form listed, click Sign and Submit.

Once all forms are submitted, your authorization will be complete.

Update Tax Information

Tax rates, such as State Unemployment Insurance (SUI) and State Disability Insurance (SDI), may change annually, or you might need to adjust your deposit schedule. In such cases, you can update your tax details in Zoho Payroll.

There are three scenarios that affect how you can edit your tax information in Zoho Payroll:

Here’s how you can update the tax information for the pay runs in these statuses:

Cases 1 and 2:

1. Go to Settings and click Taxes.
2. Click Edit next to Federal Tax Information or State Tax Information.
3. Update the necessary details.
4. Click Save.

Your changes will take effect immediately.

Case 3: To update tax information after approving at least one pay run:

1. Go to Settings and click Taxes.
2. Click Change next to the field which you want to update.
3. In the popup that appears, modify the required information and select an effective date in the Effective From field.
4. Click Save.

Your changes will take effect from the specified date.