Pyrl - Payroll Items
Purpose
This forms is used to create payroll items. Payroll items represent either additions or deductions to income for the employee, and are defined by the user to cover specific payroll scenarios. They may be assigned to
one or many employees. They will appear in the employee card under employee setup, and on the check detail and manual check screens of Pay employees, once they are created.
Usage
1. Enter a payroll item ID of up to ten characters.
2. Enter a description for the payroll item.
3. Select a 'Type'.
Addition: Includes all additions whether to gross, adjusted gross, or net.
Deduction: Includes all deductions except taxes.
State Tax : Must be used for state tax payroll items. Payroll items of this type added to employee year-to-date state tax totals.
Local Tax: Must be used for local tax payroll items. Payroll items of this type added to employee year-to-date local tax totals.
4. Select a 'Basis'
The basis is the number in which the payroll item affects. The three choices are Gross, Adjusted Gross (AGI), or Net income.
Gross: Gross income is the pretax or total income of each employee for a pay period. Additions to gross should be income that is taxable. Deductions from gross will reduce taxable income. They will be used to derive AGI.
AGI : This is taxable income that is derived by taking gross less deductions from gross. Additions with a basis of AGI are added to gross, and then subtracted back from gross automatically to derive AGI, leaving AGI the same as it was. This is done to include it in gross because it is a wage, but not to include it in taxable AGI, since it represents nontaxable wages.
Net: This is the final income representing the cash value of the paycheck. Additions to net are reimbursements which are non taxable, and are not wages. Additions to net increase net pay, not net income.
Deductions from net are employee payments of loans or payments made that would come directly from personal income. Deductions from net reduce net pay, but do not reduce net income.
Net is derived by taking gross income which includes all additions to gross and AGI, less deductions such as taxes, and other payroll deductions.
5. Enter an Amount or Percent (optional)
You may enter a default amount, percent, or both for a payroll item. The default amount and percent will be applied to all employee paycheck calculations where that payroll item is assigned, unless the default amount is overridden at the employee setup level, or even at the check detail level of the Pay Employees form. You will most likely need either a Percent or an Amount, probably not both on the same item. You may leave both values at zero, and set unique amounts or percents for individual employees in the employee card under employee setup.
6. Enter a GL posting account (required)
You must enter a GL account to debit for additions, or a GL account to credit for deductions. You may use the drilldown button to create a new GL account if necessary.
7. YTD Gross Low , YTD Gross High (optional)
These parameters automatically turn payroll item calculations on when the employee's current
year-to-date gross wages are within the defined range, and off when they are outside of the defined range. Setting these values to zero causes Integral Accounting to ignore them. The item will remain selected for that employee in the employee card under employee setup,but it will stop calculating if current YTD gross is outside the range.
8. Maximum Annual (optional)
This parameter sets the maximum amount of this item that will be applied annually to each employee's
payroll.
9. Item Tracking (optional)
You may select a preset item type or define your own for each payroll item. To define your own parameters, select "user defined or none" and click the drilldown button. On the W2 tab, select which boxes the item
will "add to" or "subtract from". The tracking type is used to calculate W2's at year end. You may change these parameters as often as you like, since they are only referenced when a W2 report is run. If you change an item's W2 box parameters, you can rerun the W2 report and it will reflect the changes. If you wish, you may wait until year end to define which W2 boxes your payroll items should affect.
10. Employer section
Check the employer box if you wish to have employer participation with a payroll item. For example,
if an employer has a policy of matching 401k contributions, they could set up the employer percentage
the same as the employee deduction, and post those amounts to an expense account and a liability
account. The employer section has no affect on an employee's paycheck, it's just an added element to
the payroll entry.
Payroll Disclaimer:
Use of this software is under the agreement that Integral Accounting is not acting as an Accountant or agent for the end-user by providing this software for their use and may not be held liable for any misuse of this software, intentional or otherwise. All Reports should be reviewed by the user's Tax Advisor prior to submitting to IRS or any other entity.