Employee State Taxes
How do I set up and manage employee state tax information?
Purpose: This help guide will show you the information you need to set up state tax withholding and state unemployment insurance information in BambooHR.
Verify the locations of employees
Accurate location information is crucial for the calculation of state taxes. Be sure to double-check the following details before setting up your employees' state tax withholdings and state unemployment insurance.
Navigate to Employee Fields in Settings and review Location information. Make sure all locations are named correctly and have the correct address listed. If you have a remote location, make sure it is marked as remote in the location settings. Remote locations will use the employee's home address, so you will need to verify that the home addresses of those employees are correct.
Job Information table
Once you verify your locations in Settings, it's important to then assign a location to each of your employees under the Job Information Table. BambooHR uses the Location field to determine how to properly tax your employees. You can update this information in bulk using the Power Edit tool or by making individual updates on the employee's Job tab.
State taxes on the Pay Info tab
1. State Tax Withholding: Click Location and select Work or Home. An employee's work location should be where they spend the most time working.
- If selecting Work, the employee's assigned location in the Job Information table on the Job tab will determine which location and the associated address to use when calculating the employee's state tax withholdings.
- If selecting Home, the employee's home address on the Personal tab will calculate the employee's state tax withholdings.
Depending on which state associates with a specific location, different fields will show up for completion under the Location field (i.e., Filing Status, Exemptions, Additional Withholding, Additional Allowances, etc.).
2. State Unemployment Insurance: Click Location and select Work or Home. An employee's work location should be where they spend the most time working. If the employee is exempt from state unemployment insurance, check the box.
- If selecting Work, the employee's assigned location in the Job Information table on the Job tab will determine which location and the associated address to use when calculating the employee's state tax insurance.
- If selecting Home, the employee's home address on the Personal tab will calculate the employee's state tax insurance.
State taxes in the New Hire Packet
When adding a new employee, you can select the employee's State Tax Withholding Location and Unemployment Insurance Location.
When setting up an employee access level, the Full Admin user(s) can grant employees View Only, View and Edit, or No Access to State W-4 Withholding information.
Only the Account Owner, Full Admin user(s), and Pay Admin user(s) can modify state unemployment insurance information.
Oregon local taxes
If your employees have Oregon listed as their work location and have filled out Employee OPT IN form for Metro Supportive Housing Services Tax (SHS)/Multnomah County Preschool for All Tax (PFA), this section allows you to document the amount they have indicated they would like withheld.
Please note: The amount indicated will override their SHS or PFA tax amount in TRAXPayroll.
If you have employees working in the state of Washington, two populated fields will appear under the State Unemployment Insurance section for you to add the Standard Occupational Classification (SOC) code and category. You can also add these fields in the employee's Taxes section in TRAXPayroll. You must fill out the SOC code and category fields for employees working in Washington before opening payroll.
Some states require local taxes. If you're unsure if your employee requires local taxes, watch this video.
The new employer tax rate will automatically populate for applicable taxes. You will be responsible for confirming the tax rate or updating the rate based on what the state has provided to your company.