The Local/Custom Rules button is where you define rules for Local, Custom 1 and Custom 2 deductions.
After you click the button, the Local/Custom Withholding Rules window will open. You can add a rule by clicking the Add button.
The rule specifies if the percentage rate is defined per employee or applies to ALL employees and is a percentage of either gross pay or the state taxable amount.
Once the rule is defined, make sure the corresponding row and column has the check box checked in the payroll default list. If the percentage rate varies per employee, complete the setup in page 1 of the employee setup.
Note: SUTA is a percentage rate of gross pay with an optional wage base cap. There are a few states that have a requirement to withhold an employee SUTA deduction along with the employer paying a portion based on different rates and wage base caps. SUTA rates are defined in the tax table setup.