TAX DEDUCTIONS & EXEMPTIONS - HOW TO COMPUTE

These are the various formulas used to compute Tax Deductions & Exemptions for
Federal & State Income Taxes.

The SEQUENCE of Computation of these formulas is from TOP ROW to BOTTOM ROW.

If there is an Upper Limit entered in the LIMIT box, the MAXIMUM DEDUCTION will be the
LIMIT AMOUNT, regardless of the computation.

Examples:                (entered means KEYED INTO RATE BOX)

         1                Deduction = Ded. + Rate entered times # of Exemptions in Employee Master

         2                Deduction = Ded. + Flat Amount entered

         3                TAX            = Rate entered times this period FEDERAL INCOME TAX

         4                Deduction = Ded. + Rate entered times this period GROSS PAY

         5                MINIMUM DEDUCTION = Amount entered in Limit Box

         6                Deduction = Ded. + this period Federal Income Tax

         8                Deduction = Ded. + STATE DEDUCT Amount from Employee Master

         9                Deduction = Ded. + Rate entered times this period Federal Income Tax