Managing and Automating Payroll Tax Determinations

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Key Takeaways

⇨ Growing organizations often struggle with complexity and leveraging new technologies in their payroll tax process.

⇨ Many partners turn to third-party partners like BSI and their TaxProfileFactory solution.

⇨ Leveraging automation can reduce errors and the time it takes to execute relative to manual processes, freeing up tax teams for other work.

Managing payroll taxes is one of the most essential yet difficult functions a tax team faces on a regular basis. A constantly shifting regulatory landscape and industry-specific challenges can make payroll tax compliance a complex task.

According to SAPinsider’s 2023 Global Tax Management Research Report, the two primary drivers of tax management strategy were the growing complexity in compliance management, governance, and regulations and the digital transformation of tax and finance through solutions like automation, AI, and the transition to SAP S/4HANA.

For help, organizations often turn to third-party partners like BSI and their TaxProfileFactory solution. The product can help maintain employee tax profiles for federal, state, local, and territory taxes. It also creates these profiles on-demand to eliminate any future adjustments.

To demonstrate how TaxProfileFactory can help organizations with their payroll tax onboarding processes, BSI shared a recent customer success story that highlights how versatile the solution is.


Recently, a grocery delivery company reached out to BSI for help with its tax and W-4 obligations. This company rapidly expanded to partner with over 350 retailers across all 50 states. Though exciting, this growth came with challenges.

Due to its rapid expansion, the company was hiring hundreds of new associates each week, across many different states. Adding to the complications, the company relied on manual processes for payroll tax onboarding. This was not just time-consuming but introduced a significant number of errors into the process.

Further complicating the process was the fact that this grocery delivery company needed to assign tax profiles based on the addresses where employees worked in some cases, but in others had to assign the profiles based on where they live, depending on the state.

Processing and managing W-4 forms also proved to be a challenge. The grocery delivery company needed to be able to help employees complete their W-4 forms so they could have a tax profile that payroll teams could use. This is an especially important ability for organizations experiencing high turnover and growth. The company also wanted employees to be notified when their W-4s need an update.

Success Story

To help the grocery delivery company solve its tax management issues, BSI demonstrated how its TaxProfileFactory solution can address these issues. To reduce manual work that is both time-consuming and error-prone, this solution can automate payroll taxes and processing. This allows tax teams to move onto other value-add work.

TaxProfileFactory can also complete tax profiles based on living and working addresses, depending on what is required, which is beneficial for companies spread out across multiple states with differing tax regulations.

Many organizations also struggle to keep track of the status of W-4 forms. TaxProfileFactory can track whether the form is completed and deliver the profile to a payroll system whether the form is complete or not. This allows tax teams to stay on track when accounting for these forms and ensure they are fully prepared when it is time to file.

To learn more, readers can visit the BSI website.

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