Payroll Mate supports user defined tax categories. In a few simple steps you can custom add local tax categories to accommodate a city tax. Local tax categories can be directed to the W-2 form when the tax is created.
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Payroll Mate generates many different types of payroll tax reports. I suggest becoming familiar with them to determine which report best fits your needs. A comprehensive report that breaks each tax down into separate fields is the taxes and deductions report as well as the employee earnings total report.