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Setting up "Other tax" payroll items to track state disability insurance

When the tax table supplies the SDI rate, you cannot edit the rate in the preset SDI payroll items. Use "Other tax" payroll items to track SDI if you pay it at a rate other than the state-mandated rate.

If you are using QuickBooks Assisted Payroll, the payroll service will not make payments on your behalf if you use an "Other tax" payroll item instead of the preset SDI payroll item.

  1. Set up employee-paid (and company-paid, if applicable) Other tax payroll item(s) to track SDI.

    Name the payroll item "SDI" or something similar. (QuickBooks displays this name on the employee's Form W-2.) For employee-paid deductions, use the "Other tax" tracking type. For company-paid tax use the "None" tax tracking type.

  2. Edit each employee. In the Edit Employee window, click the Payroll and Compensation Info tab.

  3. Click the Taxes button and click the State tab.

  4. Clear the SDI checkbox.

  5. Click the Other tab.

  6. Click the Name drop-down list and choose the other tax payroll item(s).

  7. Click OK.

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