This article describes how to set up the rates for calculating US taxes, Social Security, Medicare,etc. 

What's New

Employers may use an optional computation bridge to treat 2019 or earlier Forms W-4 as if they were 2020 or later Forms W-4 for purposes of figuring federal income tax withholding. 

Social Security and Medicare Taxes

Rates

Social Security and Medicare Taxes multiply each payment by the employee tax rate. 

(reference 2020 Publication 15 (irs.gov))

2020 Social Security Tax Rate

1. Security tax rate is 6.2%(amount withheld) each for the employer and employee (12.4% total)
2. Social security wage base limit is $137,700

2020  Medicare Tax Rate

1. 1.45% (amount withheld) each for the employee and employer (2.9% total)
2. There is no wage base limit for Medicare Tax; all covered wages are subject to Medicare Tax
3. Additional Medicare Tax withholding

•  0.9% additional Medicare Tax in excess of $200,000 in a calendar year
• No employer share for Additional Medicare Tax ( go to this site for other information about additional Medicare Tax IRS.gov/ADMT)    

2020 

Top organization unit > Rates: define Global Rates used for calculation of US taxes and contributions:

Tax Table Reference 

There are two rate options to follow for automated payroll.

• STANDARD Withholding Rate Schedules (Use these if the Form W-4 is from 2019 or earlier, or if the Form W-4 is from 2020 or later and the box in Step 2 of Form W-4 is NOT checked)

• Form W-4, Step 2, Checkbox , Withholding Rate Schedules (Use these if the Form W-4 is from 2020 or later and the box in Step 2 of Form W-4 IS checked)

Every year the US tax rates are updated, to maintain the correct calculations in Adonis, when a new payroll year is opened, a new Tax Definition file must be imported to the system. Though, the new rates are never published before the year starts, and normally are either published in January or even later, to keep the calculations running in Adonis the Tax Definition file still has to be updated and imported to the system.

After the new rates are published, Adonis will create a new file for import. Please see files below by year.

2020 .Def Tax file 

2021 .Def Tax file

Step-by-step guide

Import ready Tax Definition file

1. Open Payroll > Tax Def File > Import     
        
2. Once dialogue box is open, need to select where did you save .def the file
   
   
   

Update Tax Definition file

1. Update Def File
   
   1.)  Open Payroll > Tax Def File > Export
   
   
   2.) Select the previous year and export the file to your computer.
   
   
   3.) Update the year in the file name
   
   
   4.) Update the value in the file, you can open the file using notepad
   
    
   Under #####TABLE 7—ANNUAL Standard
             #####Single Person 
             3800,0,0.1 in the screen above with arrow since the rate from 2020 to 2021 increase these are the following information related to rate that should be updated.
   
   
   and so on... do the same for the annual step 2 checked but use the necessary rates.
2. And import it back using the steps described above for import.