Withholding at Payment Time

When the Withholding Point flag is set to 2 on Reference File category 201 for a specific company/location, vendor withholding is performed at payment time.  Withholding at payment time is performed in the Automatic Payment Creation, Manual Payment Entry, and Recording Manual Payment conversations.

Note:    The withholding amount calculated for an invoice at payment time may differ from the withholding amount calculated for the same invoice at invoice time.  At payment time, withholding is calculated based on the entire payment amount (including taxes and any other miscellaneous charges).  At invoice time, withholding is calculated based only on the subject to withholding amount (which is usually the amount subject to taxes).

When calculated at payment time, the withholding amount is calculated based on the total payment amount of the invoice and the withholding rate associated with the withholding code defined for the vendor on the Vendor Master File.  You cannot change any of the withholding information at payment time as you can at invoice time.  At payment time, the withholding amount is calculated as follows:

Unlike remittance advices for payments where withholding is performed at invoice time, the remittance advice for payments where withholding is calculated at payment time print the withholding amount as well as the payment amount. 

Withholding amounts calculated at payment time are credited to the account associated with the vendor's withholding code on Reference File category 202, Account Number Assignment.  At both invoice and payment time, the accounting transactions for withholding are the same.