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Administrator Guide
Last Updated: 2023-11-03
Define Tax Authority Exceptions from Pay Component Groups (USA)

Define Tax Authority Exceptions from Pay Component Groups (USA)

Security:
Set Up: Payroll (Calculations - Payroll Specific)
 domain in the Core Payroll functional area.
You can set up a pay component group (PCG) to either exclude or include pay components for a tax authority.
  1. Access the
    Maintain Tax Authority Exceptions Pay Component Groups
     task.
  2. Select the
    Pay Component Group
     that requires exceptions.
  3. In the
    Payroll Tax Authority
    field on the
    Exceptions for Taxes
     tab, select the payroll tax authority.
  4. If the pay component should be excluded from the PCG, select the pay component in the
    Exclude Pay Component(s)
     field. If the pay component should be included in the PCG, select the pay component in the
    Include Pay Component(s)
     field.
  5. On the
    Exceptions for Withholding Orders
     tab, specify exceptions to the disposable earnings calculation for withholding orders.
    1. From the
      Payroll Tax Authority
       prompt, select 1 or more tax authorities that calculate disposable earnings differently.
    2. From the
      Withholding Order Type
       prompt, select 1 or more types of withholding orders.
    3. When the pay component:
      • Is part of the group but the tax authority treatment of it doesn't apply, select it from the
        Exclude Pay Component(s)
         prompt.
      • Isn't part of the group but the tax authority treatment of it does apply, select it from the
        Include Pay Component(s)
         prompt.
Workday makes the PCG exceptions that you configure and displays them in the
Exceptions for Taxes
 section of the pay component
Non Effective Dated
 tab.
Example
The
State Withholding Taxable Reduction
 PCG reduces state taxable income for 401(k) contributions in all states except Pennsylvania, so the pay component
401(k) [USA]
 should be excluded for the Pennsylvania tax authority from the
State Withholding Taxable Reduction
 PCG.
Exceptions for taxes for the
State Withholding Taxable Reduction
 PCG:
Payroll Tax Authority
Exclude Pay Component(s)
Include Pay Component(s)
Pennsylvania
401(k) [USA]
With this configuration, Workday excludes the
401(k) [USA]
pay component from the
State Withholding Taxable Reduction
 PCG when processing payroll for Pennsylvania.