Setting Up Tax Rules

To set up tax rules, use the Stock Tax Types (ST_TAX_TYPE), Stock Country Tax (ST_COUNTRY_TAX), Stock State Tax (ST_STATE_TAX), and Stock Local Tax (ST_LOCAL_TAX) components.

This topic provides an overview of tax rule setup and discusses how to set up tax rules.

Page Name

Definition Name

Usage

Stock Tax Types Page

ST_TAX_TYPE

Define the tax types and classes used by your payroll department.

Stock Country Tax Page

ST_COUNTRY_TAX

Define default values for country taxes. You must first define tax types on the Stock Tax Types page.

Stock State Tax Page

ST_STATE_TAX

Define default values for state taxes. You must first define Tax Types on the Stock Tax Types page.

The data-entry fields on this page are identical to those on the Stock Country Tax page.

Stock Local Tax Page

ST_LOCAL_TAX

Define default values for local taxes. You must first define Tax Types on the Stock Tax Types page.

The data-entry fields on this page are identical to those on the Stock Country Tax page.

By setting up default tax percentages and amounts you can limit the manual tax calculations that you need to perform when participants exercise options. You can override the defaults at the time of exercise depending on an individual employee's tax situation. However, by entering default tax information you get from your payroll administrator, you can help ensure that you don't take taxes above certain limits. If you use Payroll for North America, at a minimum, the tax types must be set up to integrate with the payroll system.

Important! The tax codes and data you enter here should be directly mapped from your payroll department. Contact your Payroll Administrator to get and maintain the information stored in these pages.

Warning! You are responsible for maintaining the default tax tables.

To set up tax rules:

  1. Define tax types and classes.

  2. Define default values for country taxes.

  3. Define default values for state taxes.

  4. Define default values for local taxes.

Use the Stock Tax Types page (ST_TAX_TYPE) to define the tax types and classes used by your payroll department.

Navigation:

Set Up HCM > Product Related > Stock > Option Tax Rules > Stock Tax Types

This example illustrates the Stock Tax Types page.

Stock Tax Types page

Field or Control

Description

Stock Tax Level

Select Country, Local, or State.

Tax Class

Select from available options. If your Stock Administration system is integrated with Payroll for North America, the Tax Class is set up in your payroll department. Work with your Payroll Administrator to find out the classes that are set up for payroll purposes to ensure the classes map correctly.

Use the Stock Country Tax page (ST_COUNTRY_TAX) to define default values for country taxes.

You must first define tax types on the Stock Tax Types page.

Navigation:

Set Up HCM > Product Related > Stock > Option Tax Rules > Stock Country Tax

This example illustrates the Stock Country Tax page.

Stock Country Tax page

Field or Control

Description

Default Percentage

Enter the percentage to use as default when calculating the tax due at the country level. You can override the percentage at the time of exercise or release.

Maximum Gross

Enter a maximum gross income. To indicate that there is no limit, enter 99,999,999.

Maximum Tax

The system displays the Maximum Tax based on data you entered in Default Percentage and Maximum Gross.