What the engine computes
- Federal income tax withholding, per the current Publication 15-T
- Social Security and Medicare, including the additional Medicare surtax
- FUTA, with the credit reduction applied in affected states
- State income tax and state unemployment in every registered jurisdiction
- Local taxes, including school district and municipal levies
How jurisdiction is determined
Jurisdiction follows work location first and residence second. For an employee who lives and works in different states, Payflo applies the reciprocity agreement between them if one exists, and withholds for both where it does not.
Wage bases and limits
Social Security, FUTA, and SUTA all stop at a wage base. Payflo tracks year-to-date wages per employee per jurisdiction and stops withholding at the cap automatically.
For a mid-year hire, enter prior-employer year-to-date wages. Without them the employee is treated as starting at zero, which over-withholds.
Rate updates
Federal and state rate changes are applied on their effective dates without any action from you. The one rate you must supply is your SUTA rate, which is assigned to you individually each year.
Retroactive changes
When a rate changes retroactively, Payflo recalculates affected runs and reports the delta. It is collected or refunded on the next run rather than as a separate transaction.