To alter an existing tax formula or insert a new one select Payroll, File Maintenance and then Tax Formula Maintenance.

The top half of the screen shows the Tax Codes and their descriptions, the bottom half of the screen displays the Tax Coefficients (the formula) for each Tax Code set up. The Link Line is the first line number of the formula for that appropriate tax scale. Most tax code formulas include multiple calculation lines for each code because the rate usually changes as the dollar amount increases.

The formulas can be inserted or altered by the following:

Minimum $ Value:            The gross earnings that the rate starts or begins.

Maximum $ Value:           The gross earnings that the rate ends or changes.

Slope and Intercept:        The tax department calculates the formula through a linear equation in the form of y = ax – b, where y is the tax amount in dollars and x is the gross earnings. The slope and intercept are the values of the coefficients a & b for the formula given by the tax department.
 
The tax formulas can be maintained by the user and tailored to suit any tax situation. However it is recommended that you do not delete tax formulas that already exist, but rather add new ones as needed.