PRMENU Payroll Package Overview 3

Sample Distribution For One Check

 

The following accounts should help to show how the distribution to General Ledger is performed:

 

The following accounts or partial accounts are entered in Payroll Setup.

 

 

Vacation Pay

05130

Holiday Pay                                                             

05150

Sick Pay                                                                  

05140

Employer FICA Expense Main Account

05510

FUI Expense Main Account                                       

05512

FUI Liability Account                                                  

02300‑10000-00000

Employer FICA Liability Account                                 

02145‑10000-00000

Employee FICA Liability Account                                

02140‑10000-00000

FWT Liability Account                                                 

02130‑10000-00000

Savings Bond Liability Account                                   

02210‑10000-00000

Loan Repayment Account                                           

02220‑10000-00000

Garnish                                                                    

02230‑10000-00000

Checking Account                                                     

01010‑10000-00000

Accrual Account

 

 

The employee's accounts entered through screens 1 and 2 of the Employee File are:

 

Wage Account                                                 

05000‑10000-00000

Union Liability Account                                      

02200‑10000-00000

 

The State and City Tax Code file contains a state and city code with the following accounts:

 

SWT Liability Account

02175‑10000-00000

SUI Liability Account

02310‑10000-00000

SUI Expense Main Account

05514

OST Liability Account

02170‑10000-00000

CWT Liability Account

02160‑10000-00000

Worker's Comp Liability Account               

02140‑10000-00000

Worker's Comp Expense Main Account

05516

 


There are two accounts, 05633‑10000-00000, Shift Differential which is a taxable earning and 05630‑10000-00000, Travel & Subsistence which is a non‑taxable Earning, entered in the Deduction/Earning Code File application.  For an employee who was paid $560.00 the following transactions occurred.

 

Account No.

Description

Debit

Credit

01010-10000-00000

Checking Account

 

$560.00

05000-10000-00000

Employee's Wage Account

$650.00

 

05130-10000-00000

Vacation Pay Account

    25.00

 

05140-10000-00000

Sick Pay Account

    25.00

 

05150-10000-00000

Holiday Sick Pay

    25.00

 

05633-10000-00000

Shift Deferential

    10.00

 

05630-10000-00000

Travel & Subsistence

    10.00

 

02200-10000-00000

Union Liability Account

 

      5.00

02210-10000-00000

Savings Bond Liability

 

    10.00

02230-10000-00000

Garish

 

    20.00

02220-10000-00000

Loan Repayment Account

 

    30.00

02130-10000-00000

FWT Liability

 

    60.00

02175-10000-00000

SWT Liability

 

    20.00

02160-10000-00000

CWT Liability

 

    12.00

02140-10000-00000

Employee FICA Liability

 

    15.00

02145-10000-00000

Employer FICA Liability

 

    15.00

05510-10000-00000

Employer FICA Expense

    15.00

 

02300-10000-00000

FUI Liability Account

 

      9.00

05512-10000-00000

FUI Expense

      5.00

 

02310-10000-00000

SUI Liability Account

 

      8.00

05514-10000-00000

SUI Expense Account

      4.00

 

02170-10000-00000

OST Liability Account

 

      5.00

02140-10000-00000

WC Liability Account

 

      3.00

05516-10000-00000

WC Expense Account

      3.00

 

Total

$772.00

$772.00

 

These are a sample of accounting entries that would automatically be created after a normal payroll check has been printed and posted for the employee.  Should corrections need to be made at the payroll level you may use the Manual Transaction Processingapplication to reverse an incorrect amount or enter checks not in the normal payroll run.  Later, when the emp­loyer wishes to pay off certain liabilities, he may do so by using the Accounts Payable package through a prepaid voucher or he may directly enter the transaction through the General Ledger.

 

State And City Tax Calculations

 

The following is a description of how the fields in the Employee record, State and City Tax Code record, State and City Tax Code Table record, along with the employee's current payroll data are used to calculate the employee's state and city withholding tax.  The discussion below applies equally well to both the state and city calculations, though only state is mentioned.  Any differences between state and city calculations are specifically indicated.  It is assumed for simplicity that there are no supplemental earnings.  If there were, and there were not other types of pay recorded for the employee on the current payroll run, then the supplemental earnings tax percent of State and City Tax Code would be used to calculate the tax if this percent were not zero.  In all other cases, supplemental pay is added to all other types of pay, and tax is calculated on the total as described below.

 

1. If the employee has 99 as the number of SWT exemptions (field 27, screen 1 of Employee File Maintenance), then the SWT is simply equal to the value of the added SWT field on the Employee record (field 41, screen 1 of Employee File Maintenance).

 

2. If the employee has 98 as the number of SWT exemptions, then the SWT is computed by applying the value of the added SWT field as a percent to the employee's calculated taxable gross pay (this includes all wages and earnings except non‑taxable earnings).

 

3. If the number of SWT exemptions is neither 98 nor 99, the calculation proceeds using the state tax tables.  If the state table ID on the Employee record is blank (field 26, screen 1 of Employee File Maintenance), proceed to step 15.  SWT a fixed amount only.

 

4. The taxable gross pay is annualized by multiplying it by the number of pay periods in a year for this employee.  This is computed from the yearly periods entered on screen 1 of Payroll Setup.

 

5. The calculation method (field 3, screen 3 of State and City Tax Code File Maintenance, can be P = Percent of FWT or S = Percent of SWT, for the city tax calculation), go to step 12.

 

6. The standard deduction percent of gross pay (field 6, screen 3 of State and City Tax Code File Maintenance) is multiplied by the taxable gross pay to give the first trial value for the standard deduction amount.

 

    This is then reduced by the adjustment to the standard deduction (field 7, screen 3), and the result is compared to the minimum standard deduction amount (field 8, screen 3).  If the calculated standard deduction is less than the minimum, then it is set equal to the minimum.  The resulting value is then compared to the maximum standard deduction amount (field 9, screen 3), and if it is greater, it is then set equal to the maximum.  The result is the final value of the standard deduction amount for the year, i.e. annualized.

 

7. The taxable gross pay is reduced by the standard deduction amount, giving the adjusted taxable gross pay.

 

8. If a number has been entered for the SWT number of exemptions on the Employee record (field 27, screen 1 of Employee File Maintenance, rather than a dollar amount, this number is multiplied by the value of one yearly withholding allowance (field 10, screen 3 of State and City Tax Code File Maintenance), and the result is subtracted from the adjusted taxable gross pay.  If a dollar amount was entered for the SWT dollar exemptions on the employee record, then this dollar amount is subtracted directly from the adjusted taxable gross pay.  The result is the new value of the adjusted taxable gross pay.

 

9. If the answer to the Ded for Fica W/H? question is Y (field 5, screen 3 of State and City Tax Code File Maintenance), and then the annualized value of the FICA tax withheld (already calculated earlier in the program) is subtracted from the adjusted taxable gross pay obtained in step 8.

 

10.  The percent of FWT to deduct (field 4, screen 3 of State and City Tax Code File Maintenance), is then multiplied by the annualized value of the FWT (already calculated earlier in the program), and the result is subtracted from the adjusted taxable gross pay from step 9).

 

11.  It is at this point that the actual state tax table, itself, is used.  The adjusted taxable gross pay, as obtained in step 10, is compared to the Over amounts in the tax table, starting from the last non‑zero table entry (which should have the highest dollar amount).

 

    When the first Over amount is found that is less than the adjusted taxable gross pay, the excess is calculated by subtracting the Over amount from the adjusted taxable gross.  This excess is then multiplied by the Plus‑% value for that table line, and the result is added to the Tax‑Amt field for the table line.  This is the preliminary annualized State Withholding Tax amount.  Now go to step 13.

 

12.  If the calculation basis is a percent of Federal Withholding, the state tax table is accessed without any preliminary reductions of the employee's taxable gross pay.  The employee's annualized taxable gross pay is compared to the Over amounts in the tax table, starting from the last non‑zero table entry (which should have the highest dollar amount).  When the first over amount is found that is less than the annualized taxable gross pay, then the Plus‑% for that table line is multiplied by the annualized FWT to get the annualized State Withholding Tax amount.  (If the calculation basis is a percent of SWT ‑ in calculating CWT ‑ then SWT is used above, instead of FWT.)

 

13.  If there is a non‑zero value for the state tax credit on the employee record (field 28, screen 1 of Employee File), then this amount is subtracted from the annualized SWT of step 12.  Otherwise, if the SWT Number of Exemptions field on the employee record is a number and not a dollar amount, this number is multiplied by the Credit Per Exemption field (field 11, screen 3 of State and City Tax Code File), and the result is subtracted from the annualized SWT of step 12.

 

14.  The SWT of step 3 is now de‑annualized by dividing it by the number of pay periods in the year for this employee.

 

15.  The added SWT amount from the employee record is now added to the period's SWT amount in step 14.  This is the final value of the employee's SWT for the current pay period.

Paryroll

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  4. CHECKREC Payroll Processing Check Reconciliation Overview
  5. CLEAREMP Payroll Processing Clear Employee Totals Overview
  6. DEDCDMNT Payroll Deduction/Earning Code File Maintenance
  7. EMPAUD Payroll Employee Audit Trail Report
  8. EMPTXMNT Employee Tax Code File Maintenance
  9. PRACTMNT Payroll PR Account File Maintenance
  10. PRCHECKS Payroll Post Payroll Checks
  11. PRCHKSCN Payroll Check Reconciliation Report
  12. PRDSTSCN Payroll PR Distribution to G/L Report
  13. PRFRQENT Payroll Calculate Payroll
  14. PRHSTMNT Payroll L and I Code History File Maintenance
  15. PRJBASCN Payroll Job Analysis Report
  16. PRJBDSCN Payroll Job Distribution Report
  17. PRJOBMNT Payroll Job Code File Maintenance
  18. PRLIMNT Payroll L and I Code File Maintenance
  19. PRQTRSCN Payroll Quarterly Payroll Report
  20. PRRPTMNU Payroll Employee Reports
  21. PRSFTMNT Payroll Shift Code File Maintenance
  22. PRW2SCN Payroll W-2 Information File Maintenance
  23. EMPMNT Payroll Employee File Maintenance 1
  24. EMPMNT Payroll Employee File Maintenance 2
  25. EMPMNT Payroll Employee File Maintenance 3
  26. EMPMNT Payroll Employee File Maintenance 4
  27. EMPMNT Payroll Employee File Maintenance 5
  28. EMPMNT Payroll Employee File Maintenance 6
  29. EMPMNT Payroll Employee File Maintenance 7
  30. EMPMNT Payroll Employee File Maintenance 8
  31. EMPMNT Payroll Employee File Maintenance 9
  32. EMPMNT Payroll Employee File Maintenance: Index
  33. PRCTLMNT Payroll PR Setup 1
  34. PRCTLMNT Payroll PR Setup 2
  35. PRCTLMNT Payroll PR Setup 3
  36. PRCTLMNT Payroll PR Setup 4
  37. PRCTLMNT Payroll PR Setup: Index
  38. PRHISTSC Payroll History Reports 1
  39. PRHISTSC Payroll History Reports 2
  40. PRHISTSC Payroll History Reports 3
  41. PRHISTSC Payroll History Reports 4
  42. PRHISTSC Payroll History Reports: Index
  43. PRMANMNU Payroll Manual Transaction Processing 1
  44. PRMANMNU Payroll Manual Transaction Processing 2
  45. PRMANMNU Payroll Manual Transaction Processing 3
  46. PRMANMNU Payroll Manual Transaction Processing 4
  47. PRMANMNU Payroll Manual Transaction Processing: Index
  48. PRMENU Payroll Package Overview 1
  49. PRMENU Payroll Package Overview 2
  50. PRMENU Payroll Package Overview 3
  51. PRMENU Payroll Package Overview 4
  52. PRMENU Payroll Package Overview 5
  53. PRMENU Payroll Package Overview 6
  54. PRMENU Payroll Package Overview 7
  55. PRMENU Payroll Package Overview: Index
  56. PRTAXMNT Payroll State/City Tax Code File Maintenance 1
  57. PRTAXMNT Payroll State/City Tax Code File Maintenance 2
  58. PRTAXMNT Payroll State/City Tax Code File Maintenance 3
  59. PRTAXMNT Payroll State/City Tax Code File Maintenance 4
  60. PRTAXMNT Payroll State/City Tax Code File Maintenance: Index
  61. PRTIMMNU Payroll Time Transaction Processing 1
  62. PRTIMMNU Payroll Time Transaction Processing 2
  63. PRTIMMNU Payroll Time Transaction Processing 3
  64. PRTIMMNU Payroll Time Transaction Processing 4
  65. PRTIMMNU Payroll Time Transaction Processing: Index
  66. 2018 Tax Law Changes

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