A pretax withholding, sometimes referred to as pre-taxed or tax exempt, means the amount is deducted from gross pay prior to taxes being calculated. The amount withheld is not taxed.
Be sure to check with your tax adviser before marking a withholding as exempt.
- From the Procare Home screen click Configuration > System > Accounting Management > Payroll > dbl-click Payroll Formulas.
- At the Payroll Formulas screen select the Category "General" from the list (upper left).
- Click once on the formula you want to mark as exempt, just to select it.
- Click the Exempt From button (lower left).
- Check off any items from which it is exempt, then click Save > Exit.
If your retirement plan is exempt from Federal Income Tax and a person earns 1,000 in gross pay with 100 withheld for retirement; their taxable income would be 900.
tags: FrmWithholdingExemptFrom, faq098, exemption, exemptions