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Set up employees and payroll items

Set up payroll items

Use payroll items to define payroll items for your clients and give specifications for their setup, configuration, and behavior. Follow this list for help with setting up a pay, deduction, or employer contribution item.
  1. Select
    Setup
    , then
    Payroll Items
    .
  2. Select the
    Main
     tab.
  3. (Optional) Enter a name in the
    Report description
     field to change the description on reports and checks for this payroll item.
  4. (Deduction items and employer contributions) Select an
    Agent
     from the dropdown for liability tracking purposes.
  5. Calculation options depend on the type of payroll item selected.
  6. Payroll item
    Available calculation type options
    Additional notes
    Deduction
    • Fixed amount
    • Hourly rate - Total hours
    • Percent of after tax pay
    • Percent of gross pay
    • Percent of net pay
    Specify the deduction amount if it's the same for all employees.
    Mark the
    Weighted allocation
     checkbox to distribute a fixed amount of deductions across locations and departments.
    In the
    Special Type
     section of the Main tab of the Payroll Items screen, select the
    Garnishment
     option and select
    Creditor garnishment
     from the dropdown.
    Pay
    • Fixed amount
    • Hourly rate
    • Hourly rate - Total hours
    • Percent of gross pay
    • Percent of sales
    • Salary - Hours sensitive
    • Salary amount
    If the pay amount is the same for all employees, specify the amount, rate, or percentage.
    Employer Contribution
    • Fixed amount
    • Hourly rate - Total hours
    • Percent of after tax pay
    • Percent of deduction
    • Percent of gross pay
    • Percent of net pay
    Specify the contribution amount, rate, or percentage, and the limit for each tier.
    Select
    Graduated
     if you want to enter a tiered amount, rate, or percentage, and a limit for each tier.
    Mark the
    Weighted allocation
     checkbox to distribute a fixed amount of deductions across locations and departments.
  7. (Optional) Select a special type for the payroll item to change how it calculates or reports:
    • None
    • Retirement/Cafeteria plan
      : Choosing the Retirement/Cafeteria plan from the dropdown allows the application to automatically determine and maintain the taxability and deduction limits for this specific plan. If an employee has more than one type of IRA plan, the application will automatically apply the appropriate limit across both plans.
    • Garnishment
      : Specify the exact type of plan or garnishment by choosing it from the dropdown (Chapter 13 bankruptcy, Child support; Creditor garnishment; Defaulted student loan; Federal levy; Other).
  8. Choose a distribution option in the
    Auto-pay
     section if you use auto pay.
  9. (Pay) Select a
    Wage Type
    .
  10. (Pay) You can change the multiplier rate for Overtime and Double time, or leave it at 1.500 and 2.000.
    Changing this only affects new employee records.
  11. Under
    Taxability
    , choose a reason for a FUTA exemption if your item should be exempt.
    This information transfers to Line 4 of Form 940.
  12. (Deduction and employee contribution) Under
    Limit
    , select a deduction limit.
    • MTD
      : Sets a limit on the total amount, percent of deduction, or percent of gross pay that can be withheld for this item each month. Once the limit is reached, the application automatically restarts the calculation at the beginning of the next month.
    • Per check
      : Sets a limit on the total amount, percent of deduction, or percent of gross pay that can be withheld for this item for each payroll check. Once the limit is reached, the application automatically restarts the calculation on the next payroll check.
    • Perpetual
      : Sets a limit on the amount that can be withheld for this item. Once the limit is reached the application won't calculate it again unless the limit is changed.
    • YTD
      : Sets a limit on the total amount, percent of deduction, or percent of gross pay that can be withheld for this item for the year. Once the limit is reached, the application automatically restarts the calculation at the start of the next year.
    • For Retirement/Cafeteria plan deductions:
      • If the deduction item is set up with retirement special types 401(k), Roth 401(k), 403(b), Roth 403(b), 457 or Simple 408(p), the
        Do not apply catch-up limit
         checkbox is available. Mark this checkbox to specify that the retirement plan catch-up contribution limit increase should not be applied to the selected deduction item for any employees, regardless of their age.
      • If the deduction item is set up with retirement special types 401(k), 403(b), 457, or Simple 408(p), the 
        Subtract cafeteria 125 deduction before calculating checkbox
        is available. When this checkbox is marked and the item is set up to calculate based on a percent of gross pay, the application will subtract any Section 125 special type deduction items from the employee's gross pay before calculating the deduction item.
    • For Garnishments:
      • The
        Maximum % of disposable income
         field defaults to the appropriate percentage per garnishment rules for all types. This field is grayed out for all garnishment types except Other, for which you can specify a different limit.
      • For Other type garnishments, you can choose to specify a limit of the lesser of: the maximum percent of the employee's disposable income or the amount by which the employee's disposable income exceeds thirty times the federal or state minimum wage.
    • For employer contributions:
      • If you mark the
        Subject to Health Savings Account limit
         checkbox, the application includes the amounts that are associated with this item along with the amounts associated with any deduction item that is set up with a special type of Health Savings Account (HSA), when honoring the HSA limits for an employee. This is needed to track the employer contribution amounts to the HSA plan, because the pre-tax limit consists of both employee and employer contributions.
      • If you mark the
        Subtract cafeteria 125 deduction before calculating
         checkbox, and the employee contribution item is set up to calculate based on a percent of gross pay, the application will subtract any Section 125 special type deduction items from the employee's gross pay before calculating the employer contribution.
  13. Mark checkboxes under
    W-2 Additional Boxes
    .
  14. Select the default
    General Ledger
     liability and expense account numbers for your payroll item.
  15. Under
    Miscellaneous
    , choose Health Savings Account (HSA) or health insurance options.
    Mark the
    Require direct deposit allocation
     checkbox if you want to require it employees who use this payroll item.
  16. Mark any
    Exclusions
     that apply.
  17. Select the
    Tax Exemptions
     tab and choose any exemptions that apply.
  18. Select the
    Special Timing
     tab if you need to customize the frequency and dates for your payroll item.

This article applies to:

  • Product: Accounting CS
  • Subject: Clients, Setup

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