Report to show Unemployment Insurance Taxed Wage Base with respect to Payroll Taxes Annual Limits

The federal and some state government impose Unemployment Insurance taxes to employers in order to fund the unemployment compensation program.  The tax agencies either send the details directly to the employers or post those on their official website.

 

The Internal Revenue Service (IRS) and the state limit the tax which employers pay by specifying a maximum wage base to which the tax amount is calculated.  Once an employee's wages for the calendar year reaches the annual limit, the employer stops paying the unemployment insurance for that employee. 

 

The wage base limits are set up in NetSuite for payroll users.  The ability to expose the annual wage base limit is tracked per enhancement 146586. To review the wage base limit, follow the steps below:

 

Customize Payroll Summary to show Taxed Wage Base

1.      Reports > Payroll > Payroll Summary > Customize

2.      Click Edit Columns

3.      Click Payroll Transactions Folder

4.      Click Taxable Wage Base

5.      Click Taxed Wage Base

6.      Click Employee Folder > Click Name

7.      On the Report Preview pane, drag Employee to the extreme left portion of the pane

8.      On the top portion of the screen, beside Edit Columns, click Filters link

9.      On the Choose Filters pane, select desired Date Range

10.  Click Save or Preview

Note: Taxed Wage Base is less than the Taxable Wage Base if annual limit is reached unless there are irregular payroll adjustments.

 

To check the Taxed Wage Base limit for employees who have not reached the limit yet, create a dummy paycheck that exceeds the annual limit.  Delete the paycheck afterwards.

 

1.      Transactions > Employees > Create Individual Paycheck

2.      Select Employee

3.      On the Earnings Tab, select an earning

4.      On the Rate column, enter a dummy rate that results to a Gross Amount higher than the annual wage base limit (eg. If annual wage base limit is $7000.00, enter an amount greater than $7,000.00)

5.      Click Calculate button

6.      Navigate to Paychecks tab

7.      Click View next to employee name

8.      Navigate to Summary tab

9.      Search for the state unemployment in question

10.  Divide the amount with the state unemployment rate to get the wage base that was taxed

Note: To view the Unemployment rate set-up in the account, navigate to Setup > Payroll > Set Up Payroll > Taxes tab.

11.  Add the amount in step 10 with the Taxed Wage Base from the Custom Report created above.  The sum is the Taxed Wage Base limit.

12.  Delete the dummy paycheck

 

 

Kindly visit the government official website for complete reference.  You may also check the following links:

1. United States Department of Labor : http://workforcesecurity.doleta.gov/unemploy/statelaws.asp

2. American Payroll Association : http://www.americanpayroll.org/members/stateui/state-ui-2/

3. Internal Revenue Service : http://www.irs.gov/pub/irs-pdf/p15.pdf

 

 

 

Disclaimer: This article is written with the undertaking that tax forms, rules and laws are constantly changing and the topic is updated at the publish date. 

These materials do not constitute tax, legal, or accounting advice and neither NetSuite, nor its agents, employees, or representatives are in the business of offering such advice. 

We have no control over the websites provided in the article.  For the most current information or for tax, legal or accounting advice, please consult your tax, legal and accounting advisors.  You may also call the tax agency or visit the government official website.