Tax setup is one of the most critical parts of company onboarding. The company tax setup is generated dynamically depending on the company's and employees' work locations and information about home offices. We then prepare a needed list of tax parameters that need to be filed by companies or employees.
The system assigns Tax Reporting Entities from the Master level for the company tax setup.
Tax setup contains plenty of information which are known to Companies. For example, each company has individually set SUTA rates with the government, unlike the others.
Firstly, you must call the Tax Setup endpoint. This endpoint will return a list of tax values you must fill out. The values could be a number or percentage, combo selection, account number, registration number, or even text code.
The setup endpoint will return you enough information to render proper UI for this, along with captions, descriptions, and in many cases, even with a regular expression for client-side validation and information about item requirements. The next call (or calls) should contain updates for items filled by the company or employee.
Numeric & value format
As there is plenty of different value types, API expects string format for all of them. Numbers are US localization with a dot as a decimal separator.
In the United States, the system requires each company to setup three necessary taxes:
- Federal taxes
- State taxes
- Local taxes
Federal taxes are taxes from the federal government. To set the federal taxes, you must provide your legal Federal Employer Identification Number (FEIN).
State taxes are taxes from the states. You set the state-issued tax account number when setting up these tax entities.
An essential tax entity you need to set up is the State Unemployment Tax Act (SUTA). The SUTA tax is a payroll tax required from employers by the government.
Setting up this tax entity is state-based. Therefore, you can only use the state-issued Tax account number and the SUTA rate (issued in percentage). However, you can mark the checkbox if your company is exempt from the SUTA tax.
Local taxes are taxes from the local authorities, peculiar to local regions where your company is.
Updated 7 months ago