9 PayrollChapter 9 Payroll
Overview
The Payroll module is used to maintain personnel and payroll information, and issue checks to the company's employees.
Files
The following files are provided:
- Payroll - the time, expense, and calculated tax and pay amount for each employee/time period and check
- Personnel - identifying information for each employee
- Payroll Checks - as payroll items are paid, and the system prints checks, each check is recorded in the Payroll Check file
- Payroll Code - used to identify the type of payment on each of the detail line items in the Payroll file
- Payroll Information - contains yearly parameters needed to calculate payroll (FUTA, SUTA, FICA)
- Payroll Deduction - contains the deduction codes for all items which can be deducted from an employee's check
- Payroll Tax - The state, federal, and local tax tables utilized during payroll calculation
Procedure
All payments to employees are made using payroll checks, which are printed by the system and contain one payroll detail item. Use of the Payroll module requires the following steps:
- For each employee to be paid, a payroll detail item should be entered in the Payroll file. The use of month codes (controlled by the system administrator) properly segregate these items into months for accounting purposes.
- When checks are to be printed, a process on the Payroll menu is used. Payroll items to be paid are selected based on a check date. Checks may be printed on either a local printer or on the system printer.
- If a payroll item needs to be corrected after a check has been issued, the payroll check should be voided, and a replacement check entered. IMPORTANT NOTE: The correction should be made using an adjusting item, with ONLY THE CHANGES entered, and the original payroll item referenced. When the new check is issued, the TOTAL OF THE ITEMS will be reflected on the check. This is necessary as tax calculations cannot be "undone", and voided payroll items are still included in the employee's annual information.
Monthly
Several payroll reports should be run and verified before payroll information is posted to the journal entry file. At each month end, the following procedures should be followed:
- Select and run the reports from the payroll menu entitled "Range of pay periods - journal entry info" and "Range of pay periods - journal entry info #2" and verify the accuracy of the information.
- Select and run the two reports for accrued federal and state taxes from the payroll menu entitled "Accrued federal taxes at month end for closing" and "Accrued state taxes at month end for closing" and verify the accuracy of the information.
- Select and run the report from the payroll menu entitled "Open - as of date - for closing purposes" and verify the accuracy of the information.
Based on the information verified in the above reports, update any information as necessary, using AvUp, and rerun any reports which change based on the updates made.
- For payroll checks, the reports containing "between two dates "should be run (for both voids and non-voids) to verify the total payroll disbursements for the month. The total on this report should be verified against the total payroll disbursements for the month from the company's manual records.
After the above procedures have been performed, payroll is now ready to be posted using the posting process on the payroll menu. The posting process will automatically post all tax, salary, deduction, and expense information to the journal entry file.
9.1 Payroll
This file contains the detailed backup for each payroll check to be issued to an employee. An item should be entered for each employee for each period in which a payroll check will be issued; the amount of taxes and the total of all deductions are calculated and stored within the item when the payroll item is saved. The checks are then printed by using a process in the payroll menu.
Adjustments are made within the payroll system by voiding the payroll check, then creating an additional item for the same employee which references the original item using the ADJUST.PAYROLL field. The new "adjusting" item may then be selected for payment, and the system will automatically combine the adjusting and adjusted items into one item, and print a check for the combined amount.
9.1.1 Item-id and attributes
The item-ids are automatically assigned by the system, and are seven digits in the format YYMM###, where
- YYMM is a four digit month code. For example, July 1993 would have a month code of 9307.
- ### is a three digit sequence beginning at 001 each month.
For example, the first entry of July 1993 would have an item-id of 9307001.
9.1.2 Attributes - row section
Period end: PERIOD.ENDING The last day of the payroll period for which the payroll item is being created.
RequiredValue Limit 1
Check date: CHECK.DATE The expected date that the check for this payroll item will be given to the employee. The year of the date will determine the Social Security and Medicare rates, and other yearly information from the Payroll Information file.
RequiredValue Limit 1
Personnel number: PERSONNEL The employee's personnel number. After the number is entered, information about the employee will be pulled in to the payroll record, including withholding state, recurring deductions, etc. from the personnel file.
The period ending date for a Payroll item which references a terminated employee must be prior to the termination date for the employee.
Only one payroll item can be open for any employee at a time, due to the requirement of checking taxes against limits such as Social Security or Medicare.
RequiredValue Limit 1
Reference File Personnel
Display : NameFind File
Personnel.Find
Payroll item to be adjusted: ADJUST.PAYROLL
The item-id of any payroll item that is to be combined with the current item in printing a payroll check should be entered. Only payroll items that have been previously voided may be entered in this attribute. Reference File
Payroll Display : Emp
Per.End
Gross pay: PAY.GROSS
The total gross pay for the current payroll, including all types of pay shown in the item.Blocked
Taxable gross: TAX.GROSS The taxable gross includes taxable payroll codes, less any taxable deduction codes. The taxable gross will differ from the pay gross by the amount of exempt payroll codes and taxable deduction codes.
Blocked
Federal income tax: FIT
The amount of federal income tax. If no amount is entered, the system will calculate this value. If an amount is present, the system will assume it is an override, and use the entered value. Be sure that if the item is edited and amounts that affect the payroll taxes are edited, the federal income tax value is deleted, allowing the system to recalculate the tax.Value Limit 1
Social security: SOCIAL.SECURITY The amount of social security tax withheld.
Medicare tax: MEDICARE The amount of Medicare tax withheld.
State income tax: SIT The amount of state income tax. If no amount is entered, the system will calculate this value. If an amount is present, the system will assume it is an override, and use the entered value. Be sure that if the item is edited and amounts that affect the payroll taxes are edited, the state income tax value is deleted, allowing the system to recalculate this value.
Value Limit 1
: LIT
The amount of local income tax. If no amount is entered, the system will calculate. If an amount is present, the system will assume it is an override and not calculate. Be sure that if the item is edited and amounts that affect the payroll taxes are edited, the local income tax will have to be deleted.
Value Limit 1
Check number: CHECK.NUMBER
The check number of the check that pays the payroll item.Blocked
Reference File Payroll.Check
Display : Payroll Check.Amount
Check amount: CHECK.AMOUNT The amount of the pay check.
Blocked
Void date: VOID.DATE
The date that the payroll item's check was voided using the process on the payroll menu; the item may be paid with an adjusting item, by adding a new item and referencing the current item using the ADJUST-PAYROLL attribute.Blocked
Withholding state: WH.STATE The state which was used for withholding tax purposes for this payroll.
BlockedReference File
Payroll.Tax Display : Name
Withholding locality: WH.LOCAL The locality (if required) which was used for withholding tax purposes for this payroll.
BlockedReference File
Payroll.Tax Display : Name
SUTA state: SUTA.STATE The state for which state unemployment tax will be calculated for the current payroll, if any.
BlockedReference File
Av.State Display : Name
Comments: COMMENTS Any additional information to be kept concerning the current payroll item.
9.1.3 Attributes - column section
Payroll code: PAY.CODE The code for payroll items. This attribute must be entered in corresponding values with either a payroll code amount or number of hours.
Reference File Payroll.Code
Display : NameFind File
Directory
Hours: HOURS
The number of hours corresponding with the payroll code entered, which should not be entered if a pay amount has been entered.
Amount: AMOUNT
The amount of the additional pay code, entered in corresponding values with the Pay Code. Cannot be entered if hours are entered.
Pay amount: PAY.AMOUNT
The calculated amount of payroll for the corresponding payroll code. For payroll codes with corresponding amounts, it is simply that amount. For payroll codes with hours, it is the calculated amount of pay based on the employee's salary, number of hours entered, the factor of the payroll code, and the number of annual hours for the company (maintained in the Payroll Information file).Blocked
Deduction code: DEDUCTION.CODE The code for any given deduction for one pay period. This attribute must be entered in corresponding values with the deduction amount.
Reference File Payroll.Deduction
Display : NameFind File
DirectorySets : DEDUCTION.AMOUNT
Deduction amount: DEDUCTION.AMOUNT The amount for any given deduction during one pay period, entered in corresponding values with the deduction code.
Sets : DEDUCTION.CODE
Expense account: EXPENSE.ACCOUNT
The general ledger account code for each expense item to be paid on the payroll check; these items are not included in the gross pay. This attribute must be entered in corresponding values with the expense amount.Reference File
Chart.Account Display : Name
Find File Chart.Account.Find
Sets : EXPENSE.AMOUNT
Expense amount: EXPENSE.AMOUNT
The amount of the expense, entered in corresponding values with the expense code.Sets : EXPENSE.ACCOUNT
9.1.4 Checks and verifications during Update
A payroll number may not be entered twice on the same adjusting payroll.
Adjusting payroll items may only refer to items which were paid by a payroll check which is now void.
An adjusting item must have the same employee number as the original item being adjusted.
On any one line, only hours or an amount may be entered. If both are required for a particular pay code, two lines are required.
On any one line, either an hourly or amount figure must be entered.
9.2 Personnel
Information concerning all employees of the company is kept in this file and is used primarily for the calculation of payroll.
9.2.1 Item-id and attributes
The item-id pattern is three numeric digits, assigned by the system in increasing order.
9.2.2 Attributes - row section
Name: NAME The name of the employee, which should be entered last name first (ex: Smith, William D.).
Value Limit 1
Title: TITLE
The employee's title.
Street: STREET
The street address of the employee.Value Limit 3
City: CITY The city where the employee resides.
Value Limit 1
State: STATE
The state where the employee resides. The state entered must be a legal state as it exists in the State file.Required
Value Limit 1Reference File
Av.State Display : Name
Find File Av.State.Find
Zip: ZIP The employee's zip code.
Value Limit 1
Phone: PHONE
The phone number of the employee.
Social security number: SSNO
The social security number of the employee.Value Limit 1
Union Member: UNION.MEMBER This field denotes whether the employee is a member of the union.
RequiredValue Limit 1
Reference List Y Yes
N No
Pay type: PAY.TYPE
The pay type for the employee. This type is used to identify the base to use in calculating hourly wages when required. The number of hours to use as a base for weekly and bi-weekly pay may be different than that used for semi-monthly or monthly pay (the standard is 2080 and 2088 hours, respectively). These amounts are maintained in the Payroll Information file. (Note: the standard hours for semi-monthly and monthly pay are 87 and 174; the 2088 is used as the number of annual hours to allow a salaried employee to have a "rounded" calculation, as 87/2088 = 1/24 and 174/2088 = 1/12).Required
Value Limit 1Reference List
B Bi-weekly M Monthly
S Semi-monthly W Weekly
Withholding state: WH.STATE The item-id for the tax table in the Payroll Tax file for the withholding state.
RequiredValue Limit 1
Reference File Payroll.Tax
Display : NameFind File
Directory
Withholding locality: WH.LOCAL
The item-id of the tax table in the Payroll Tax file for the local withholding.Value Limit 1
Reference File Payroll.Tax
Display : NameFind File
Directory
SUTA state: SUTA.STATE
The state in which the company is paying state unemployment tax for the employee.Required
Value Limit 1Reference File
Av.State Display : Name
Find File Av.State.Find
Federal exemptions: FEDERAL.EXEMPTIONS The number of exemptions that the employee is claiming for federal tax reporting purposes, calculated using the IRS W-4 form. A special feature to block federal taxes is available by entering a 99 exemption, in which case no federal tax will be deducted due to exemptions. This is normally used in conjunction with the additional federal deduction attribute below.
Value Limit 1
State exemptions: STATE.EXEMPTIONS
The number of exemptions that the employee is claiming for state tax purposes. In most cases the number of state exemptions will match the number of federal exemptions. A special feature to block state taxes is available by entering a 99 exemption, in which case no state tax will be deducted due to exemptions. This is normally used in conjunction with the additional state deduction attribute below.Value Limit 1
Additional federal deduction: FEDERAL.EXTRA The additional amount to be deducted from the employee's check for federal tax. This is normally used when an exact amount is desired and the federal exemptions are blocked.
Value Limit 1
Additional state deduction: STATE.EXTRA
The additional amount to be deducted from the employee's check for state tax. This is normally used when an exact amount is desired and the state exemptions are blocked.Value Limit 1
Marital status: MARITAL.STATUS This attribute contains a code to denote whether the employee is married or single.
RequiredValue Limit 1
Reference List M Married
S Single
Department: DEPARTMENT
The employee's department will determine where amounts for this employee are posted to the general ledger.Required
Value Limit 1Reference File
Department Display : Name
Find File Directory
Insurance code: INSURANCE.CODE The insurance code indicating the type of coverage that is provided for the employee.
RequiredValue Limit 1
Reference List F Family
S Single X None
Employment date: EMPLOYMENT.DATE The hire date for the employee.
Eligibility date: INSURANCE.ELIGIBLE.DATE The date that the employee is eligible for insurance coverage.
Value Limit 1
Birth date: BIRTH.DATE
The birth date of the employee.Value Limit 1
Next review date: REVIEW.DATE The date on which the employee is to receive a review.
Termination date: TERMINATION.DATE The date the employee is terminated.
Comments: COMMENTS Any additional information that needs to be recorded concerning the employee.
Current salary: CURRENT.SALARY The current salary, maintained by the system as the last value in the salary field.
HiddenValue Limit 1
9.2.3 Attributes - column section
Salary change date: CHANGE.DATE The date that the employee's salary is changed.
Date stamp
Salary change reason: CHANGE.REASON
The reason that an employee's salary is changed (e.g. merit increase, promotion, etc.).Sets : CHANGE.DATE
SALARY
Salary: SALARY
The annual salary of an employee. The system uses the last value listed in this attribute when computing a payroll. NOTE: For reports, a synonym called LAST-SALARY is available which will display only the most recent salary.Required
Sets : CHANGE.DATE CHANGE.REASON
Deduction code: DEDUCTION.CODE The code used for an employee's recurring deduction(s).
Reference File Payroll.Deduction
Display : NameFind File
DirectorySets : DEDUCTION.AMOUNT
Deduction amount: DEDUCTION.AMOUNT The amount of each recurring deduction.
Sets : DEDUCTION.CODE
9.2.4 Checks and verifications during Update
The system will display a warning message if the state of the employee's address does not match the withholding state entered. The system does not prohibit this as some states have reciprocal agreements so that tax withheld in one state will be applied to that employee's income tax in another.
Information must exist for the withholding state in the Payroll Tax file, and for the Suta state in the Payroll Information file.
9.3 Print checks
Purpose and frequency of use
This process is used when printing payroll checks. Before payroll checks can be printed, payroll items must be entered for each employee, and the process to compute payroll must be run.
Operation
[X]Enter the check date ?[x]
The check date of the payroll items for which checks are to be printed. The system will select all payroll items with this check date.
[X]P=System printer, L=Local printer ?[x] The system Printer (P) option allows the user to place the output in the Spooler, and then send the output to any of the system printers. See the documentation on the Spooler for more information on its use. The Local printer (L) option allows the user to print the output on a printer attached directly to the back of the terminal in use. If no printer is attached, the system will not display the output, and the report or special function will have to be rerun.
[X]When the printer has the checks loaded, press (Enter) and a test check will be printed, or enter SKIP to skip the printing of a test check ?[x]
The option of printing a test check or checks is available to the user so the checks may be lined up properly in the printer. The system will print a void check to verify that the checks are properly aligned. If SKIP is entered, the system will not print a void check, and will begin printing checks where the checks are positioned in the printer.
[X]Type RESET to print another test check, (Enter) to continue ?[x] If another test check is requested, simply type the word RESET. If the checks are ready to be printed press (Enter) .
[X]Enter the first check number ?[x]
Enter the number of the first check to be printed, making certain that any test checks printed are taken into account.
[X]Press (Enter) if ready to print ?[x] If the checks are ready to be printed, press (Enter).
9.4 Void checks
Purpose and frequency of use
This process is used when a payroll check has been printed for an employee and it needs to be voided for some reason. The documentation to Compute Payroll describes how to properly adjust a voided payroll item. This procedure will void payroll checks and the associated payroll items.
Operation
[X]Enter the void date ?[x] The date for which the check(s) are to be voided should be entered.
[X]Enter the check number to be voided ?[x]
The number of the check to be voided is to be entered.
[X]On the user's terminal, the system will display the check number, amount, Employee, payroll item, and period ending date of the check to be voided.[x] [X]Enter VOID to void this check ?[x]
If the check listed is to be voided, enter VOID.
9.5 Reports - Payroll
The reports currently available for the Payroll file are as follows:
Month end closing - accrued federal taxes
Month end closing - accrued local taxes Month end closing - accrued state taxes
Month end closing - open One period - time review
Open Range of check dates - 941 liability
Range of check dates - 941 liability - and open Range of check dates - by state
Range of check dates - state withholding Range of check dates - state withholding summary
Range of pay periods Range of pay periods - deduction summary
Range of pay periods - journal entry exp & ded info Range of pay periods - journal entry info
Single check date - by state Year-to-date totals - all employees
Year-to-date totals - one employee
9.6 Reports - Personnel
The reports currently available for the Personnel file are as follows:
Active - mailing list
Active - paragraph form Active - summary data
Active - with pay rates Inactive - paragraph form
One employee - paragraph form
9.7 Reports - Payroll Checks
The reports currently available for the Payroll Checks file are as follows:
Between two dates, by check number - no voids
Between two dates, by check number - void checks Between two dates, by date - no voids
Between two dates, by date - void checks Numeric range, by check number - no voids
Numeric range, by check number - void checks Numeric range, by date - no voids
Numeric range, by date - void checks Numeric range, total only - no voids
One day - no voids One day - void checks, issue date
One employee - no voids One employee - void checks
9.8 Post payroll to G/L
Purpose and frequency of use
This process is run on a monthly basis to post all account and amount information from the month's payrolls to the journal entry file. It is important to review all of the payroll information for the month prior to posting, as this process cannot be reversed by the user. The edit limit for the payroll file must be set above the month being posted.
If payroll is reposted for a month, the system will create new journal entries. The original journal entries should be zeroed out using AvUp, with an appropriate note entered in the Description field. This approach is utilized to avoid deleting journal entries and to assist in providing an audit trail.
Operation
[X]Payroll was last posted to month ****The edit limit for the payroll file must be set above the month being posted
Enter the month code to post ?[x]
The month code for the month being posted should be entered. The system will automatically create a journal entry in the month being posted. If a month is entered that has been previously posted, the system will display a large warning block on the screen, but will still allow the user to post if necessary.
If the month entered had been posted previously, the system will display a warning message on the user's terminal, indicating that the vouchers for the month entered have previously been posted, as follows.
[X]************************************************
** Warning - you have entered a month which ** ** may have already been posted **
************************************************
Enter C to continue ?[x] If you would like to continue with the special function to post payroll, enter C to continue.
[X]P=System printer, L=Local printer ?[x]
The system Printer (P) option allows the user to place the output in the Spooler, and then send the output to any of the system printers. See the documentation on the Spooler for more information on its use. The Local printer (L) option allows the user to print the output on a printer attached directly to the back of the terminal in use. If no printer is attached, the system will not display the output, and the report or special function will have to be rerun.
After the entry has been displayed, the system will then prompt for posting.
[X]Enter POST to post the payroll information ?[x] If POST is entered the system will post the payroll information.
9.9 FUTA report
Purpose and frequency of use
This function is used to calculate the Federal Unemployment Tax to be paid for a particular quarter of the year by state.
Operation
[X]Enter the 4-digit year ?[x] The year for which you are running the report. For example, 1988.
[X]Enter the quarter number ?[x]
FUTA contributions are filed on a quarterly basis. Quarter 1 is from January - March, quarter 2 is from April - June, quarter 3 is from July - September, and quarter 4 is from October - December.
[X]P=System printer, L=Local printer ?[x] The system Printer (P) option allows the user to place the output in the Spooler, and then send the output to any of the system printers. See the documentation on the Spooler for more information on its use. The Local printer (L) option allows the user to print the output on a printer attached directly to the back of the terminal in use. If no printer is attached, the system will not display the output, and the report or special function will have to be rerun.
9.10 SUTA report
Purpose and frequency of use
This function is used to calculate the State Unemployment Tax to be paid for a particular quarter of the year by state.
Operation
[X]Enter the 4-digit year ?[x] The year for which you are running the report. For example, 1988.
[X]Enter the quarter number ?[x]
SUTA reports are filed on a quarterly basis. Quarter 1 is from January - March, quarter 2 is from April - June, quarter 3 is from July - September, and quarter 4 is from October - December.
[X]P=System printer, L=Local printer ?[x] The system Printer (P) option allows the user to place the output in the Spooler, and then send the output to any of the system printers. See the documentation on the Spooler for more information on its use. The Local printer (L) option allows the user to print the output on a printer attached directly to the back of the terminal in use. If no printer is attached, the system will not display the output, and the report or special function will have to be rerun.
9.11 941 report
Purpose and frequency of use
This function is used to produce a report from the Payroll file that provides the information required for the IRS Form 941 for a quarter.
Operation
[X]Enter the 4-digit year ?[x] The year for which you are running the special function. For example, 1988.
[X]Enter the quarter number ?[x]
941 reports are filed on a quarterly basis. Quarter 1 is from January - March, quarter 2 is from April - June, quarter 3 is from July - September, and quarter 4 is from October - December.
[X]P=System printer, T=Terminal, L=Local printer ?[x] The system Printer (P) option allows the user to place the output in the Spooler, and then send the output to any of the system printers. See the documentation on the Spooler for more information on its use. The Terminal (T) option will display the output on the user's terminal, with the system pausing after each screen has been filled. The user should press any key to continue, or enter ctrl-X to exit from the output and return to a menu. The Local printer (L) option allows the user to print the output on a printer attached directly to the back of the terminal in use. If no printer is attached, the system will not display the output, and the report or special function will have to be rerun.
9.12 Print W-2 forms
Purpose and frequency of use
This function is used to print W-2 information on the standard one-sided, sprocket mounted W-2 forms. Consult your dealer for information concerning these forms. The spooler should be set to spool for 8 1/2 X 11 forms.
Operation
[X]Enter the 4-digit year ?[x] The year of the check date of the payroll items for which these W-2s are being printed. W-2s are printed in January of the year following the payroll year.
[X]When the printer has the W-2s loaded, press (Enter) and a test W-2 will be printed, or enter SKIP to skip the printing of a test W-2 ?[x]
The option of printing test W-2s is available to the user so the W-2s may be lined up properly in the printer. If SKIP is entered, the system will begin printing W-2s where the they are positioned in the printer.
[X]Enter RESET to print another test form, (Enter) to continue ?[x] If RESET is entered, the system will print another test form. If (Enter) is entered, the system will continue and will print the W-2s.
9.13 Payroll Information
The Payroll Information file contains yearly parameters needed by various processes in the payroll module. The parameters pertaining to the federal goverment (Social Security, Medicare, and FUTA related) are listed each year in the Circular E that is provided to all employers by the Internal Revenue Service. The parameters relating to state governments (SUTA) are provided by each of the various states periodically.
9.13.1 Item-id and attributes
The item-id is the four digit year.
9.13.2 Attributes - row section
Social security percentage: SOCIAL.SECURITY.PCT The percent for Social Security that applies to the employees' gross wages during the year.
RequiredValue Limit 1
Medicare percentage: MEDICARE.PCT The percent for Medicare that applies to the employees' gross wages during the year.
RequiredValue Limit 1
Social security limit: SOCIAL.SECURITY.LIMIT The dollar limit for the amount of gross pay on which Social Security will be deducted.
RequiredValue Limit 1
Medicare limit: MEDICARE.LIMIT The dollar limit for the amount of gross pay on which Medicare will be deducted.
RequiredValue Limit 1
Futa percent: FUTA.PERCENT The percentage to be applied to employees' wages used for federal unemployment tax purposes, as reported annually on form 940.
RequiredValue Limit 1
Futa limit: FUTA.LIMIT The maximum amount of wages subject to FUTA tax.
RequiredValue Limit 1
Annual hours for monthly pay types: ANNUAL.HOURS.MONTHLY The number of hours which are used as a base for monthly or semi-monthly pay types. The normal entry in this field is 2088, which is 24 semi-monthly pay periods of 87 hours, or 12 monthly pay periods of 174 hours.
RequiredValue Limit 1
Annual hours for weekly pay types: ANNUAL.HOURS.WEEKLY The number of hours which are used as a base for weekly or bi-weekly pay types. The normal entry in this field is 2080, which is 52 weekly pay periods of 40 hours, or 26 bi-weekly pay periods of 80 hours.
RequiredValue Limit 1
Federal id number: FEDERAL.ID.NUMBER The federal id number of the employer must be entered here. It is normally of the format ##-#######. This number is used by the system to print W-2 forms at year end.
RequiredValue Limit 1
Company address: COMPANY.ADDRESS The company's address is maintained in this attribute, and will be printed on W-2 forms in the format entered here. Use multiple values for each of the lines of the company's address; due to the size of the W-2 form, this attribute is limited to three values.
RequiredValue Limit 3
9.13.3 Attributes - column section
Suta state: SUTA.STATE Each state that the organization files state unemployment returns is to be entered in corresponding values with the SUTA percentage and limit.
Reference File Av.State
Display : NameFind File
Av.State.Find
Suta percent: SUTA.PERCENT
The percent to be applied to employees' wages for state unemployment return purposes.
Suta limit: SUTA.LIMIT
The maximum amount of wages subject to SUTA tax.
9.13.4 Checks and verifications during Update
There are no special checks or verifications for the Payroll Information file.
9.14 Payroll Deductions
Payroll Deductions are used for those items that the company will deduct from an employee's paycheck, either on a permanent or temporary basis. Common payroll deduction codes include insurance, pension, and wage garnishments. Deduction codes are entered in both the Personnel and Payroll files for recurring and one-time deductions, respectively.
9.14.1 Item-id and attributes
The item-ids may be assigned by the user, using any letters and numbers.
9.14.2 Attributes - row section
Name: NAME The name of the deduction code.
Value Limit 1
Base account: BASE.ACCOUNT
Used by the system to determine where on the general ledger payroll items referencing this payroll code will appear. The payroll posting process will concatenate the employee's department to the base account and post the item to the resulting general ledger account in the Chart of Accounts file. The value entered must be the "base" of a chart of account number, which is the first four digits in the standard chart of accounts.Required
Value Limit 1
Tax status: TAX.STATUS
The tax status determines whether the corresponding deduction amount will reduce the taxable gross income; if so, a tax status of T should be entered. An example of a taxable deduction, i.e., one that will reduce the taxable gross income, is a 401k deduction. The tax status does not affect Social Security and Medicare calculations, as the gross pay amount is used for these calculations. Required
Value Limit 1Reference List
T Taxable E Exempt
9.14.3 Attributes - column section
The Payroll Deductions does not have columnar attributes
9.14.4 Checks and verifications during Update
There are no special checks or verifications for the Payroll Deductions file.
9.15 Payroll Codes
Payroll codes are required on each line item of pay in the Payroll file, and include all types of pay issued (regular, overtime, bonus, commission, etc). Pay codes may be classified as to whether the amount related to the code should be included in taxable gross for calculation of withholding tax.
9.15.1 Item-id and attributes
The item-ids may be assigned by the user, using any letters and numbers.
9.15.2 Attributes - row section
Name: NAME The name of the payroll code.
Value Limit 1
Base account: BASE.ACCOUNT
Used by the system to determine where on the general ledger payroll items referencing this payroll code will appear. The payroll posting process will concatenate the employee's department to the base account and post the item to the resulting general ledger account in the Chart of Accounts file. The value entered must be the "base" of the chart of account number, which is the first four digits in the standard chart of accounts.
When the base account is entered, the system will verify that a chart of accounts item is present for every entry in the Department file.Required
Value Limit 1
Factor: FACTOR
The factor by which hours entered corresponding with this payroll code are to by multiplied. For example, the factor for double time would be 2.00.Required
Value Limit 1
Tax status: TAX.STATUS
The tax status determines whether the amount corresponding to the payroll code will reduce the taxable gross income; if so, a tax status of T should be entered. The tax status does not affect Social Security and Medicare calculations, as the gross pay amount is used for these calculations. Required
Value Limit 1Reference List
T Taxable E Exempt
9.15.3 Attributes - column section
The Payroll Codes does not have columnar attributes
9.15.4 Checks and verifications during Update
There are no special checks or verifications for the Payroll Codes file.
9.16 Payroll Tax Tables
The payroll system uses the Payroll Tax Tables to determine the amount of withholding for a paycheck. "Ranges" are specified in a columnar section, with the lower and upper limits of a range specified, as well as the base amount of tax and the applicable percentage for a range. All dollar amounts are entered into this file on an annualized basis.
For example, a range might show a lower limit of $10,000.00, an upper limit of $15,000.00, a base tax of $450.00, and a percent of 5.0. If the employee was paid on a monthly basis, and their pay was $1000.00 per month, the system would calculate a tax of $550.00 for the year ($1000 x 12 months = $12,000. Tax is therefore the base (450.00) plus the amount over 10,000 (12,000-10,000) times the tax percent (2,000 x 5.0% = 100.00), so the total tax is 450.00+100.00=550.00). This amount is then divided by the number of periods to get the amount of tax for the current payroll item.
9.16.1 Item-id and attributes
The item-id is the two digit post office abbreviation for each state, with the addition of a suffix for married (M) or single (S) if the jurisdiction has separate tables, or any other code utilized by the jurisdiction as a suffix. The federal tax tables are maintained in this file under the item-ids USS and USM for single and married taxpayers respectively.
9.16.2 Attributes - row section
Name: NAME The name of the tax table, including the state and any identifying information for tables which have a suffix.
Value Limit 1
Tax year: TAX.YEAR
The last year that the tax tables were updated.
Id number: ID.NUMBER
The state or federal id number for W-2 purposes.Value Limit 1
Standard: STANDARD This attribute contains the amount to deduct from gross pay for each exemption, the standard deduction, the percentage standard deduction, the minimum of the standard percentage, and the maximum of the standard percentage. This information is maintained in the order described above, with each value separated by a comma. In many tax jurisdictions, only the first of these standard deductions is found.
DO NOT ENTER THESE AS SEPARATE VALUES ! Place all of the numbers in one value, with commas separating the different numbers (ex: 800.00,2500.00). If only one or two of the numbers apply to the jurisdiction being entered, simply leave the others blank (no commas are needed on the end if the last values are blank).
Value Limit 1
Withholding account: WITHHOLDING.ACCOUNT
The chart of account number for amounts withheld to be posted to when payroll is posted on a monthly basis.Required
Value Limit 1Reference File
Chart.Account Display : Name
Find File Chart.Account.Find
9.16.3 Attributes - column section
Lower limit: LOWER.LIMIT The lower limit of the tax table range for the employee's annual salary.
Upper wage limit: UPPER.LIMIT The top amount in a "range" from a tax table, which must be greater than the corresponding lower limit.
Exemption: EXEMPTION The amount of annual salary exempted for the corresponding range; as of 1992, this column was only in use in the State of Connecticut.
Base tax amount: BASE.TAX The base amount of tax for the corresponding range of pay amounts, in annualized dollars.
Percent tax: PERCENT.TAX The percentage of tax to be applied in the corresponding range, expressed as a percentage with three decimal places. For example, to enter a tax rate of five and three quarters percent, the number 5.750 should be entered.
Credit percentage: CREDIT.PCT The percentage credit on the withholding amount; as of 1992, used only in the State of Connecticut.
9.16.4 Checks and verifications during Update
Numbers being entered in the standard deduction attribute should have commas between them. As such, DO NOT include commas in the number itself.
The ranges in the columnar section are checked to insure that the upper limit on each line item is always greater than the lower limit.