How to Add Local Tax in a Paystub? (Step-by-Step Guide)

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Adding Local Tax in your paystub is simple and fully customizable. Our system allows you to enter your own label, so the tax will appear exactly as you type it (e.g., “Local Tax”, “City Tax”, etc.).

📌 What is Local Tax?

Local tax is a payroll deduction charged by a city, county, or local authority. It is separate from federal and state taxes and may apply depending on the employee’s work location.

  • City tax
  • County tax
  • School district tax

⚙️ Step-by-Step: Add Local Tax

✅ Step 1: Go to Additions / Deductions

  • Scroll to the Additions / Deductions section
  • Click + Additions / Deductions

✅ Step 2: Select Deduction Type

  • Choose Benefit in the Type field
  • Select Custom Benefit/Deduction

✅ Step 3: Enter Description

In the Description field, type:

Local Tax

Tip: You can also use “City Tax”, “County Tax”, or “Local Income Tax”.

Important: The system will display this text exactly as entered on the paystub.

✅ Step 4: Enter Amounts

  • Current Amount → Tax for this pay period
  • YTD Amount → Total tax deducted so far

Example:

  • Current Amount: 10
  • YTD Amount: 30

✅ Step 5: Preview Your Paystub

  • Check the preview panel
  • “Local Tax” will appear under Deductions
  • Net pay will update automatically

📊 How It Appears on Paystub

Once added, your entry will be displayed under the Deductions section exactly as entered.

It will appear alongside other deductions such as:

  • Federal Tax
  • State Tax
  • FICA Taxes (Social Security & Medicare)
  • Local Tax

Note: The system does not rename it as “Other Deduction” — your custom label is shown exactly as entered.

⚠️ Important Notes

  • Local tax is not required in all states
  • Only applicable in certain cities or counties
  • Always verify correct tax amounts before generating the paystub

Incorrect values may affect:

  • Net pay calculation
  • Financial records

💡 Pro Tips

  • Use clear naming like “Local Tax”
  • Keep YTD values updated
  • Match amounts with payroll records
  • Use specific labels if needed (e.g., “NYC Local Tax”)

🎯 Quick Summary

  1. Go to Additions / Deductions
  2. Select Custom Benefit/Deduction
  3. Enter Local Tax
  4. Add amounts
  5. Verify in preview

✔ Your custom label will appear exactly as entered on the paystub.