PERIODIC ENTRIES







The Periodic Entries function is used each pay period to enter data on who is to be paid, how much they are to be paid, and which deductions are to be taken for the pay period.



Advanced Features include:



Automatic Entry for Salaried and Regular personnel.



Special Entries with operator's choice of Tax Treatment for nonrecurring pay or deductions.



Hours Entry from an ASCII Text File, or supplemental pay from an ASCII Text File.

THE PERIODIC ENTRIES MENU









HOURS ENTRY AND UPDATE





MM Main Menu

AE ALL EMPLOYEES Enter hours for all employees

EC EMPLOYEE CODE Enter hours by employee code

HR HOURS REPORT Print hours data

TH TRANSFER HOURS data from hours file: replace previous data

AH ADD HOURS data from hours file: keeps previous data

RS REPORTING SALARIED hours used this pay period (currently 0)

PS PAY SALARIES only: skip hourly employees



Your selection, please: AE





PERIODIC ENTRIES

This program allows you to enter information on hours worked and non-recurring pay and deduction data for all active employees on the master list. The program is used for routine entry of periodic information required to calculate payroll.

AE Enter Hours for all employees

PS Pay Salaries only

Hours entry program for entire payroll in a single session. This function asks you for hours and other pay amounts for all active employees as shown on the Data Input Form. You must be prepared with data to enter the entire payroll. The Pay Salaries only selection skips the hourly employees: data for these employees can be entered using the "EN" selection described below. If most of your hourly employees are paid each pay period, use "AE": if not, "PS" followed by "EN" may be more efficient.

EN Enter hours by employee number

Performs the same function as #1 above, except hours are entered only for the employees you select. May be used to change previously entered hours information.

HR Print hours data

Prints a listing on paper containing all the information currently on file as a result of hours entry. Use the listing to check the accuracy of hours data before running the calculation program.



TH Transfer hours from hours file

AH Add hours from hours file



Allows reading an hours file created by another program instead of entering hours manually. "TH" erases any previous data entry, while "AH" adds to previous data.

RS Reporting Salaried hours used this pay period



Allows the operator to automatically enter a given number of hours along with automatic pay for each "Reporting Salaried" employee, without stopping. If this entry is zero, the system can automatically pay, but will stop and request the number of hours for each "Reporting Salaried" employee.



ENTRY METHODS





The methods available for Hours Entry may vary with the configuration of your specific payroll system. The Standard Entry methods are:





CATEGORY SPECIFICATION METHOD



With this method of entering hours, you specify which of the sixteen pay categories will be used to accumulate each entry. Predefined Categories are numbered from 1 to 8, and User-Defined Categories are numbered 9 and up. You may enter up to eight lines (expandable in groups of eight on special order) of pay by category for each employee every pay period. The same pay category number may be assigned to more than one line, making it possible to pay an employee at several different pay rates in the same category.

No matter which of the other Entry Methods you use initially, you can always review and edit all entries using the Category Specification method.



After one category entry is made, you will be prompted for another until you have entered 8 lines or until you simply press ENTER in response to the request for the number of hours. This is your signal to the system that you are through entering pay by category for the current employee.





AUTOMATIC SALARY ENTRY



The system will ask for permission to pay Salaried and Regular employees their regular salary. If permission is given, the system will use the employee's regular salary and pay category specified during employee data entry. If permission is denied, the Category Specification Method is used for salaried employees.



In order to avoid unnecessary operator intervention, Special Amounts entry is suppressed when Automatic Salary Entry is selected. Special Amounts may be added to the Entry after Automatic Entry has been completed by selectively editing the affected employee Hours records (using EC). Selective editing can also be used to supplement or enter exceptions to normal salary or salary category to reflect Vacations, paid overtime, etc.



When hourly employees are encountered in a mixed hourly & salaried payroll during Automatic Salary Entry, the system automatically reverts to the Category Specification Method for any hourly employees encountered, and then continues the Automatic Salary Entry process.





SPECIAL ENTRIES

The Special Entries feature is provided as a means of handling non-recurring (Special) Pay or Deduction items that are to be included in the employee's paycheck. The Special items are applicable only in the pay period in which they are entered and no YTD detail record (other than lump-sum totals) is maintained for them. A summary of special amounts is provided with each Payroll Report for bookkeeping purposes. Special amounts consist of an operator-entered description (up to ten characters in length), an amount, and a Tax Treatment code.



Special Amounts with no sign (positive amounts) are treated as pay, and negative Special Amounts are treated as deductions.





ENTRY FROM AN HOURS TRANSFER FILE



You can bypass manual entry of hours and read a disk file that contains the data. This feature is intended primarily for interfacing with software that collects hours data and wishes to pass it to the payroll system, such as custom billing systems, time clocks, remote entry via modems, etc.



The file uses an ASCII format easily produced with word processing programs, most data base programs, and many spreadsheets. Both categorized pay and Special items may be entered via an Hours Transfer file.





USING PERIODIC ENTRY





BEFORE YOU START



Before starting to enter any payroll information, it pays to get organized. Collect time cards and all other documents that are required to calculate employees' pay. If any changes need to be made to the employee master list such as new hires, terminations, pay rate changes, etc., update the affected Employee Records in the master file first and then return to this program.

If you do not have a "Data Input Form" printed from a previous payroll run, go to the "Master Report" program and print one from the selection on that menu. We recommend you use the system's own data input form (or your own equivalent form) as your worksheet before using the computer. The names and input data necessary to perform calculations are presented on the data input form in the same order as expected by the program. You will find that this is a valuable time saver and greatly reduces errors.

Go through your payroll information and fill in all the applicable blanks on the data input form for each employee. This usually amounts to adding up hours from time cards and recording any special pay amounts or deductions. Visually check your work to make sure everything is correct before submitting the data to the computer.



ORDER OF HOURS DATA ENTRY



Order of Entry can be changed by selecting one of the Alternate Access Keys at the time of Periodic Entry (see Chapter 13: Initialize and Utilities). Thus, hours can be entered in order of Department, Social Security Number, Last Name, etc. rather than by Employee Code (the default order of entry). The Data Input Form can also be printed in any of these same orders for your convenience.



To choose an alternate order of entry, use the Initialize and Utilities' Keyfile Maintenance selection (from the Main Menu: IN, then KF). Generate the appropriate Alternate Key before you start Periodic Entry. The Periodic Entry program will automatically detect the presence of an alternate key, and ask your permission to use it for data entry.



ENTERING HOURS DATA INTO THE SYSTEM

Choose periodic entries menu selection AE "Enter hours for all employees", or selection EC, "Enter hours by employee code". If you choose AE, you must be prepared to enter the entire payroll in a single job. If you choose EC, you may enter employees one at a time by employee number or code. For either selection, the first time you enter data for a new pay period after Initializing the previous period, the system will then display the prompt:

ENTER DATE PERIOD ENDED ?

Your response to the above prompt should normally be to enter the date of the last day of work this payroll will cover.



Note that this period ending date will be used to name a backup file for this period. Therefore, you must avoid entering a previously-used date unless you intend to replace that period's backup data. If you are issuing a between-payrolls special paycheck or making a corrective run, you should enter an intermediate date which will not be used as a pay period ending date.



Like all dates in the payroll system, the date can be entered as MM/DD/YY, MM-DD-YY, or MMDDYY.

Example: Suppose you want to enter payroll information for the payroll period ended May 7, 1983. Your response to the above prompt could be 5/7/83, 5-7-83, 050783 or 50783: any of these forms is acceptable.

If the date is valid, you may proceed to enter hours data as explained below.



SELECTION OF DEDUCTIONS TO BE TAKEN THIS PERIOD



If there are no warning messages or you have chosen to continue despite a warning message, a list of fixed deductions you have defined will appear on the screen with the status "- no -" or "-YES-" appearing next to each one. This indicates which deductions will actually be taken as directed in each Employee Record for the current payroll. The "YES" and "NO" selections will default to the values which existed the last time you initialized the current payroll. This feature is used (for instance) to take an Insurance deduction only during the first week of each month for a Weekly payroll.

Deductions taken for this session

1 -YES-> Insurance

2 -YES-> Annuity

3 -YES-> Savings

4 -YES-> Uniform

5 - no - Misc.

6 - no - Savings C

7

8

9

10

11

12

Enter deduction to enable/disable > ?





To change the active/inactive status of any deduction, enter the number of the deduction. You may activate or deactivate any or all of the deductions in this way. You may correct the status of a deduction by entering its number a second time.



The deduction selections you activate are transferred to the employee record at the time of hours data entry for each employee. The deduction amounts are determined at the time of payroll calculation. If you want a different combination of deductions to be used for a certain group of employees, you can use several Periodic Entry sessions to enter the hours data. When you edit hours data, you also replace the deduction selections with the current deduction selections.



Remember that if you wish to change the deductions taken, you must either re-enter or edit the affected employee's current payroll data.





USING THE CATEGORY SPECIFICATION ENTRY METHOD



The specific characteristics of the Category Specification Method are as follows:

1. There are from zero to eight entries (expandable on special order in groups of eight).

2. Each entry specifies the number of hours (or quantity), the pay rate, and the pay category: gross pay is automatically extended. Alternatively, a gross pay amount may be entered directly with no hours or rate.

3. If no rate is entered, the rate entered in the Employee Record is used as a default.



4. When Category Specification entry has been completed for a given employee, the system automatically asks for any Special Amounts in addition to the eight lines of categorized pay for that employee.



If the AE (ALL EMPLOYEES) entry option was chosen, following entry of the date, the system will display the name and social security number of each active employee in the Employee ID order (unless you chose an alternate entry order, as explained above). This display will be followed by prompts for hours, special amounts, etc.



If the EC (EMPLOYEE CODES) entry option was chosen, you will be prompted for an employee ID code. If you are entering employees by Employee ID, entering a blank ID or simply hitting ENTER in response to a prompt will return you to the Periodic Entry menu.



BRUCE A. CLINTON CODE: BAC



HOURS CATEGORY RATE GROSS JOB

1. 24.000 REGULAR 76.250 1830.00 0

2. 0.000 Dbl Time 0.000 100.00 0

3. 0.000 IMPUTD GLI 0.000 45.00 0

4.

5.

6.

7.

8.

Press ENTER for next screen, (-) for previous or line number





When entering data, if an amount is zero, simply hitting the ENTER key is sufficient, otherwise enter the appropriate information. The sequence of entry is as follows:



HOURS entry is first. If you wish to end standard category entry at this time, simply press ENTER and hours data entry for this employee will be terminated. If you do not wish to enter hours, but do wish to enter a gross pay amount, enter the letter x in upper or lower case and the program will skip to gross pay entry with hours and rate set to zero. For normal hours entry, enter the number of hours.

CATEGORY refers to one of the Predefined or special User-Defined Pay categories as discussed below. Enter a number from 1 to 16, corresponding to the appropriate category. If you make an invalid entry or no entry at all, the possible categories will be displayed for you. The program requires that you enter a valid Category before continuing.

RATE defaults to the employee's standard hourly wage except in the case of the predefined Overtime pay category, which defaults to 1.5 times the hourly wage (or hourly equivalent for salaried employees) found in the employee's data record. If you want to keep the default, simply press ENTER. If you want to use a different rate, enter it at this time.

GROSS will not be displayed unless you entered X for hours, signifying that the pay amount was not paid by the hour. In all other cases, it is automatically calculated as Hours times Rate.

JOB NUMBER may be any number from 1 to 32767. It is used by the Job Cost report as defined therein. If a job number is not applicable to this pay item, press ENTER to set the job to zero. A zero job number is not included in any job costing reports. If you have not enabled job costing in the Company Data record, you will not be asked for a job number.

When all hours, rate, and classification information has been entered, the data you have entered will be displayed for editing. If the information is correct as shown, simply press ENTER. If you want to change something, enter the number that begins the line you want to change and press ENTER. You will then be given a chance to re-enter the data.

After hours or salary information is entered the system will ask for a "Special" description. If there are no special amounts to be entered, simply press the ENTER key, otherwise enter your description according to the rules above. Following your entry of a description, the system will prompt "ENTER AMOUNT OF ..." and repeating your description. Enter a positive number if the amount is to increase the employee's pay, a negative amount for a deduction.

The system will prompt for up to five Special descriptions and amounts. When you have no more special amounts to enter, simply hit the ENTER key when prompted for a description. The system will then display the information for editing.





USING THE AUTOMATIC ENTRY METHOD





Automatic Entry uses the Employee Record to compose a list of categorized pay items. To save time, you can use Automatic Entry to complete the payroll, and then selectively edit the automatic entries to accommodate any exceptions (such as Vacation, Sick Pay, Overtime, or nonrecurring Special Entries) which occur during the current period. SALARIED EMPLOYEES (including REGULAR EMPLOYEES) may be paid by Automatic Entry. You will be asked at the beginning of the Periodic Entry session:

Pay regular salary (y/n)?



If the answer is no, the program will revert to the Category Specification entry method, using an "equivalent hourly rate" derived from the employee's salary and the pay period in use. This allows you to enter any combination of hourly-based and flat dollar amounts in place of the salary.



If the answer is yes, Automatic Entry will be used for all Salaried and Regular personnel during the current Periodic Entry session. The hours field for these employees is set to "standard" hours amount based on the number of working hours in a year divided by the number of pay periods in a year, assuming a 40 hour week. The gross amount is set to the salary defined by the employee's data record. To allow completely-unattended operation of Automatic Entry for Salaried and Regular payrolls, the Special Entries are bypassed during Automatic Entry. The system will automatically pause and revert to the Category Specification Entry Method for any Hourly personnel encountered in the payroll file, and then resume Automatic Entry.



The "standard" hours amount is strictly for internal comparison purposes and does not imply that the employee is subject to wage-hour laws. You may suppress the printing of "standard" hours from pay stubs by answering "NO" to the "Print Salaried Hours?" question appearing in the Company Data Record.





The automatic entries will be:



SALARIED EMPLOYEES:



Line 1: Gross Pay equal to the Salary in the Category shown as the Salary Category in the Employee Record. Equivalent Full-Time Hours, based on 40 hours/week, pro-rated to the actual pay period in use, as well as an equivalent rate are also entered.



Lines 2-5: Auxiliary Pay Items #1-#4 from the Employee Record.





REGULAR EMPLOYEES:



Line 1: Gross Pay equal to the Salary in the Category shown as the Salary Category in the Employee Record. Normal Hours per week, pro-rated to the actual pay period in use, as well as an equivalent rate are also entered.



Lines 2-5: Auxiliary Pay Items #1-#4 from the Employee Record.



COMMISSIONS: During Automatic Entry, Auxiliary Pay items set up as Commissions will cause the program to ask the operator for the Commission Basis. The Commission Rate (in percent) from the employee file will be automatically applied to the Commission Basis to derive the Commission. More than one Commission Basis may have to be entered if multiple Auxiliary Pay items have been set up as Commission items in the Employee Record: this allows up to four different Commission items at different rates to be figured automatically.







USING SPECIAL PAY AND SPECIAL DEDUCTIONS



The Special Pay and Deductions feature is provided as a means of handling non-recurring (Special) items that are to be included in the employee's paycheck. The Special items are applicable only in the pay period in which they are entered and no permanent record (other than lump-sum totals) is maintained for them. A summary of special amounts is provided with each Payroll Report for bookkeeping purposes. Special amounts consist of an operator-entered description (up to ten characters in length), an amount, and a code.



BRUCE A. CLINTON CODE: BAC

DESCRIPTION AMOUNT CODE JOB ACCOUNT NUMBER

1. BONUS 100.00 A 0

2.

3.

4.

5.

Press ENTER for next screen, (-) for previous or line number







You should use User-Defined Pay Categories or Company-Wide Deductions, rather than Special Entries, to handle any items for which you must keep individual YTD totals or which must be reported separately on W-2's.





Special Amounts with no sign (positive amounts) are treated as pay, and negative Special Amounts are treated as deductions.



The payroll system maintains a separate "tax basis" total for each employee for each taxing authority. The Tax Codes can cause these "tax basis" totals to differ from Unadjusted Gross pay.



Tax Codes for Special Deductions

Tax Codes for Special Deductions have the same meaning as codes used with Regular deductions, as discussed in the chapter on Company Data Entry. The codes are as follows:



Code Meaning

A I Q - REGULAR, deducted after tax.

B J R - FICA Only, deducted before Fed. & State tax

C K S - TAX EXEMPT, deducted before any taxes are computed.

D L T - ALL EXCEPT FICA: Fed. & State but no FICA taken.

Reduces auxiliary accumulator.

Reduces advance accumulator.

No accumulator affected.











Code A deductions come out of the employee's fully-taxed net pay and do not affect any accumulator. To reduce an advance which was not taxed previously out of current pay, use code I. To reduce whatever is in the auxiliary accumulator, use code Q. A tax-deferred plan such as a section 401(K) or 403(B) plan, may use codes B, J, or R (depending on how the plan is set up). For a tax-exempt deduction, use codes C, K, or S.



Note that unlike Regular Deductions, Special Deductions are not automatically limited to the Advance or Auxiliary accumulator balance when codes I,J,K,L or Q,R,S,T are used.



Tax Codes for Special Pay Amounts

The Tax Codes for Special Pay Amounts have meanings parallel to those used for deductions as follows:





Code Meaning

A I Q - REGULAR, normal taxable pay.

B J R - FICA Only, payments exempt from Fed. & State Tax.

C K S - TAX EXEMPT, reimbursement for expenses, etc.

D L T - ALL EXCEPT FICA: certain "cafeteria plans", etc.

Increases auxiliary accumulator.

Increases advance accumulator.

No accumulator affected.







NOTE: Users should always consult with a tax expert regarding use of tax codes. Laws concerning tax treatment of income vary with location and your specific situation, and are subject to frequent change. The standard Tax Codes are versatile enough to handle most situations, but contact Datasmith for custom tax treatment modifications if you need them.



EXAMPLES OF SITUATIONS

HANDLED BY SPECIAL ENTRIES



COMMISSIONS. You wish to include an occasional commission in an employee's paycheck, which is a taxable amount. To use the Special Pay facility for this item, just enter a description of COMMISSION, the amount of the commission and a code of A. COMMISSION will then be included as one of the employee's pay amounts and will be added to gross pay before taxes are calculated. (If commissions are paid regularly, you probably will want to establish a User-Defined Pay Category for them instead.)



Note: Taxes are calculated every period on the assumption that the employee will be paid the same amount each period for an entire year. Because of this, the tax calculated may be excessive if the commission is large and paid infrequently. To avoid excessive withholding, you may wish to change the employee's Withholding Method (see Employee Data). This will allow you to withhold a fixed percentage or a constant amount. Don't forget to change the tax control code back to the employee's "normal" Withholding Method if you change it only for a single period.



Another way to prevent over-withholding for a single period is to use the Manual Check program to adjust the amount of withholding after the Payroll has been Calculated (before checks are issued).



WARNING: Some States do not allow fixed percentage or constant amount withholding. Before deciding how your Company will handle this, consult with a tax expert to determine which Withholding methods are legal in your State.

BONUSES. Are handled in exactly the same way as commissions, except you may use a description of BONUS if desired. Note the tax consequences of large, infrequent bonuses above.

PAY ADVANCES or LOANS. Use a code of K, to signify a non-taxable payment that adds to the advance accumulator. When the loan or advance is repaid by a Special Payroll deduction, use code I and a negative Special Pay amount. When repaying a loan in via Special Deductions, it is the operator's responsibility to make sure that the loan is not overpaid (the employee usually will help with this). Using Special Deductions, several irregular payments of various sizes can be deducted until the loan is repaid.



If the loan is to be repaid on a regular schedule with level payments (or a level percent of gross pay or a level amount per hour worked), the preferred method is to set up a regular Code I Deduction for the Employee rather than using Special Deductions. Regular deductions automatically stop when the loan is repaid, and the last deduction is automatically adjusted to equal the loan balance.



If loans are made frequently, or if you want to accumulate and report the total amount of loans made during the year (as opposed to the balance, which is kept in the Advance Accumulator), you probably should establish a User-Defined Pay Category entitled "Advances" with a tax code of K instead of using Special Pay.

PURCHASES of goods or services from the employer by an employee may be deducted from the employee's pay. In this case, simply make an appropriate description entry, use code A so taxes will not be affected, and enter a negative amount to signify a deduction.







HOURS REPORT



The Hours Report includes both Categorized pay entries and Special Entries for each employee paid during the Current Period. At the end of the report, a Summary by Pay Category is printed.



The report may be directed to the screen or a printer.







Midwest Manufacturing Co. Page 1

Hours Listing: All Employees

Period ending 1-15-89

Number/Name

Category Hours Rate Gross Code Job Account Number

===============================================================================

BAC CLINTON, BRUCE A.

REGULAR 24.000s 76.250s 1830.00 0

Dbl Time 0.000s 0.000s 100.00 0

IMPUTD GLI 0.000s 0.000s 45.00 0

BONUS 100.00 A 0

HWJ JOHNSON, HAROLD W.

REGULAR 86.670s 13.846s 1200.00 0

MJW WEAVER, MARY JANE

REGULAR 64.000 7.150 457.60 0

VACATION 8.000 7.150 57.20 0









Midwest Manufacturing Co. Page 2

Hours Listing: All Employees

Period ending 1-15-89



----- Totals by Category for Current Pay Period -----

CATEGORY TOTAL HOURS GROSS PAY

======================================================================

REGULAR 254.67 $ 4,337.60

OVERTIME 0.00 $ 0.00

VACATION 8.00 $ 57.20

HOLIDAY 0.00 $ 0.00

TIPS 0.00 $ 0.00

SICK 0.00 $ 0.00

NON CASH 0.00 $ 0.00

OTHER 0.00 $ 0.00

Dbl Time 0.00 $ 100.00

IMPUTD GLI 0.00 $ 45.00

SHIFT PREM 0.00 $ 0.00

VEHICLE 0.00 $ 0.00

MANSE ALLW 0.00 $ 0.00

COMMISSION 0.00 $ 0.00

LTD LEAVE 0.00 $ 0.00

TIPS REPTD 0.00 $ 0.00

======================================================================

262.67 $ 4,539.80













USING THE HOURS TRANSFER FACILITY





You can bypass manual entry of hours and read a disk file that contains the data. This feature is intended primarily for interfacing with software that collects hours data and wishes to pass it to the payroll system. Another use of this feature is to make entry of complicated, recurring payrolls automatic by using the same Hours file each pay period. The technical details below are intended primarily for programmers.



To use the hours transfer facility, select "Transfer Hours Data from Hours File" from the "Periodic Entries" sub-menu. The data file must conform to the following specifications.



1. The hours transfer file must be named "HOURS.PAY". It is the responsibility of the user to assure that the file is correct for the current period, as the program makes no checks on validity.



2. The program must be a "sequential" file. This type of file is also called a "stream" file in other systems.



You can create this kind of file from dBASE 3 (Ashton-Tate) or compatible database programs with commands of the form:



COPY TO HOURS.PAY FIELDS <field list> TYPE DELIMITED



...and specifying the correct fields. You can also create this kind of file from BASIC with commands of the form (Hours Block example):



WRITE #3, TYPE,CODE$,CATEGORY,HOURS,RATE,GROSS,JOB



In general, a sequential file has the following characteristics:



a. The file consists of a continuous stream of characters, without "records".



b. Data fields are separated either by a comma or by a carriage return - linefeed sequence. If a field is to contain a comma as data, the field must be enclosed in quotation marks. All data is in ASCII.





3. There are two types of data blocks recognized by the Payroll program: Hours Blocks and Specials Blocks. These blocks correspond to hours entry and specials entry as explained in the manual under "periodic entries".



4. An hours block has the following format:

TYPE,"CODE",CATEGORY,HOURS,RATE,GROSS,JOB



TYPE must be "1", indicating an hours record.



CODE is the employee's ID code. It is recommended that the code be enclosed in quotes, since a comma is valid in an employee code.



CATEGORY is a number between 1 and 8 designating the pay category as defined in periodic entries. Usually, regular pay is category 1, overtime is category 2, etc.



HOURS is the number of hours worked in the category. Hours may be zero if GROSS is non-zero.



RATE is the pay rate per hour. If RATE is zero and hours is non-zero, the program will use the default rate associated with the employee's permanent data. If the default rate is used, an automatic adjustment will be made if the category is overtime.



GROSS is the employee's gross pay in the category. If GROSS is zero, it will be filled in automatically with hours x rate, providing hours is non-zero. If both hours and rate are zero, the GROSS field must have a value.



JOB is the job number associated with the work. A job number may be in the range from 0 to 32765. If job numbers are not used, the job number should be zero.



EXAMPLE:

1,"A-234",1,35.2,0,0,0



Means type 1 (hours block), Employee Code A-234, category 1 (regular), 35.2 hours worked, default rate, calculated gross, and a job number of zero. This is a typical entry in its most simple form.

1,"34-56",2,8.5,15.20,0,135



Means type 1 (hours block), Employee Code 34-56, category 2 (overtime), 8.5 hours worked, rate of 15.20 per hour, calculated gross, and a job number of 135.



5. There may be up to eight hours blocks for each employee, each pay period. Each block must follow the rules above. If there is an error in the data, the program will print an error message and the block will be ignored.



6. A specials block has the following format:

TYPE,"CODE","DESCR",GROSS,"TAXCODE",JOB,"ACCOUNT"



TYPE must be "2", indicating an specials record.



CODE is the employee's ID code. It is recommended that the code be enclosed in quotes, since a comma is valid in an employee code.



DESCR is a description of from 1 to ten characters describing the special.



GROSS is the gross amount of the special. If the gross amount is positive, the amount is a pay amount. If the gross amount is negative, the amount is a deduction.



TAXCODE is the tax handling code as explained under periodic entries.



JOB is the job number associated with the work. A job number may be in the range from 0 to 32765. If job numbers are not used, the job number should be zero.



ACCOUNT is the account number to which the amount is to be posted.



EXAMPLE:

2,"8764","BONUS",100,"A",0,""



Means type 2 (special), employee code 8764, a description of "BONUS",an amount of $100 (a pay amount), tax code "A", no job number, and no account number.

2,"1-235A","PURCHASE",-12.50,"A","300.5.2"



Means type 2 (special), employee code 1-235A, a description of "PURCHASE", an amount of 12.50 (a deduction), tax code "A", and an account number of 300.5.2.



7. There may be up to five specials blocks for each employee, each pay period. Each block must follow the rules above. If there is an error in the data, the program will print an error message and the block will be ignored.



8. Data for a specific employee must be contiguous within the hours file, but individual employees need not be in any predefined order. If data for an employee appears in two non-contiguous areas in the same hours file, the last data accessed will be used. For the same reasons, if two or more hours file are read, information in the later files will replace any information for the same employee read in a previous file. Employees not referenced in an hours file are not affected in any way by reading an hours file.





PREDEFINED PAY CATEGORIES

Eight Ready-to-Use Predefined and Eight User-Defined Pay Categories are provided by the standard Custom Payroll system. Hours and YTD Pay are accumulated for each employee for each Pay Category. The Eight Ready-to-Use Predefined Pay categories are:



1 REGULAR 5 TIPS

2 OVERTIME 6 SICK

3 VACATION 7 NON CASH

4 HOLIDAY 8 OTHER





All Predefined Categories are treated as fully-taxable wages. If non-taxable or specially-taxed amounts are to be entered, use a User-Defined Pay Category or the Special Amount entry facility with an appropriate tax code as explained later in this chapter.



REGULAR, VACATION, HOLIDAY, SICK, and OTHER default to the hourly wage on file in each employee's record, and are treated as taxable wages in all cases. Sick Pay may be excluded from wages listed on Unemployment Reports: this option is exercised at the time the Unemployment Report is printed, and is not a concern during Periodic Entry.

OVERTIME defaults to 1.5 times the hourly wage from the employee record in standard systems. The operator may override this rate. Custom systems may use different default overtime rates.

TIPS creates an automatic deduction in the same amount on the assumption that the tips are reported only and are already in the possession of the employee. All taxes are withheld, and the amount of the tips become part of gross pay. (In the unlikely event that hours are entered in conjunction with tips, the default rate will be the hourly wage from the employee record.) Year-to-date tips are reported as "Social Security Tips" and included in "Wages, tips, other compensation" on W-2's when the Predefined TIPS Category is used. Normally, enter "X" when prompted for "hours" so that gross tips may be entered directly. Establish a User-Defined Pay Category if you need to handle Allocated Tips.

NON CASH wages are handled in the same way as tips, in that they create an automatic deduction in the amount of the payment.

Certain non-cash benefits, such as personal use of a company car, are considered taxable income under current law. The payroll system calculates the tax on these benefits and deducts it from the employee's wages. These benefits are handled as follows:

1. To record a non-cash benefit, enter the gross amount of the benefit in the NON CASH pay category. You can enter gross amounts entering an "X" when asked for "hours", as explained elsewhere in the manual.

2. At calculation time, the amount of the non-cash benefit is added to gross income, and to the employee's tax basis accumulators. Taxes are computed as if the benefit was part of regular wages (Other tax treatments for non-cash benefits or Imputed Pay items may be obtained by using a User-Defined Pay Category with NON-CASH handling and the appropriate Tax Treatment Code).

3. Since the benefit was not a direct payment to the employee, the amount of the benefit is automatically treated as a deduction from NET income from the period. This removes the amount of the benefit so that it is not paid in cash. Amounts of the benefits and the balancing deduction are reported separately on the payroll report for accounting purposes.

4. All non-cash benefits are reported as part of "Wages, tips, and other compensation" and as "Fringe Benefits" on W-2 forms.





USER-DEFINED PAY CATEGORIES



User-Defined Pay Categories allow the user to classify and accumulate pay in new ways, with detailed check stub reporting and period and YTD totals. Amounts isolated in User-Defined Pay Categories may optionally be selected for inclusion in special W-2 reporting items in boxes 7, 14, 15, 16, 17, or 18 (box numbers refer to the 1990 Form W-2).



User-Defined Pay Categories are defined on a Company-Wide basis. The definitions are kept in the Company Record: See the Company Data Entry chapter for information on establishing User-Defined Pay Categories.

Each User-Defined Pay Categories is handled (processed) like one of the Predefined Pay Categories, but is accumulated separately and taxed in different ways using the same Tax Control Codes defined for Special Pay (described below). However, the handling and tax treatment are predefined by the user for a given payroll, and are not changed by the operator during payroll data entry.





If Predefined or User-Defined Pay Categories give you correct paychecks but incorrect W-2 reporting for your situation, you should be able to use combinations of tax-coded User-Defined or Special pay and tax-coded Regular or Special deductions to obtain the desired result. DATASMITH can also provide custom W-2 reporting for any unusual situations.



Auxiliary Pay Items may be set up to automatically include User-Defined pay components in Salaried or Regular employees' paychecks. This allows you to automatically pay complex salaries composed of up to five differently-taxed and handled components: which may include non-cash items. This capability greatly simplifies handling of multiple-component salaries and "Imputed Pay" items such as Excess Group Term Life Insurance, Allocated Tips, Vehicle Use, etc.





EXAMPLES OF SITUATIONS

HANDLED BY USER-DEFINED PAY CATEGORIES





TIPS are taxable pay amounts to the employee, and are generally handled by one or more of the following methods:



Method #1: Reported Tips



The employee pockets his or her own tips and reports the amount to the employer. It is then the employer's responsibility to collect the tax. Using this method, tips are entered as Standard Pay Category 5 (TIPS) and no User-Defined Pay Category entry is necessary. Items entered in the TIPS category add to Taxable Gross Pay, but not to Net Pay.



Method #2: Pooled Tips



All tips are pooled and distributed to employees on payday. In this case, simply enter these pooled tips in a before tax (Code A) User-Defined Pay Category named "Tip Pool", and use a Handling Code of 5 (TIPS). The amount of the pooled tips will be added to the employee's Taxable Gross Pay, taxed, and will then contribute to Net Pay. Using the "TIPS" Handling Code will cause this amount to be included in "Wages, tips, other compensation" and "Social security tips" on the W-2 forms at year end.



Method #3: Allocated Tips



IRS requires that certain restaurant employees report at least 8% (specific example may be valid only in 1989) of their pro-rata share of food receipts as tips. If they do not, the difference between what they report and the 8% requirement is reported by the employer as "allocated tips". In this case, enter the "allocated tips" in a non-taxed (Code C) User-Defined Pay Category named "ALLOC TIPS", and use a Handling Code of 7 (NON CASH). The amount of the allocated tips will be accumulated separately, but will not contribute to net pay. No taxes will be collected by the employer on this amount, and it will NOT be included in either "Wages, tips, other compensation" or "Social Security Tips". An operator selection will allow amounts included in this pay category to be reported as "Allocated Tips" on W-2 forms at the time the forms are prepared.

PREPAID VACATIONS occur when the employee receives a paycheck for vacation time in advance of the actual vacation. Since this is really a pay advance, it can be treated as a loan. If your company has a policy of pre-paying for vacation time, you can handle this situation as follows:



1. Set up the Company Record to handle prepaid vacation:



Establish a Tax Code "K" User-Defined Pay Category named "VAC PREPAY" and use a Handling Code of 1 (REGULAR).



Establish a Company-wide Tax Code "I" Regular Deduction named "VAC REPAY".



2. Using Periodic Entry, enter either the number of vacation hours (and let Periodic Entry use the "Standard" rate to figure vacation pay) or the net dollar value of the employee's Vacation Prepayment, using the "VAC PREPAY" Pay Category, as an additional pay line item in the employee's last paycheck before leaving on vacation.



3. Establish the amount of "VAC REPAY" to be deducted for the employee as 100% (of gross pay).



4. While the employee is on vacation, enter the employee's earned Regular time in the "VACATION" Category (3) and activate the "VAC REPAY" deduction.



The result will be that the employee's net pay will be zero for that pay period and no paycheck will be printed. When the employee returns, the loan will have been repaid with Vacation time. Since a Regular Deduction was used with the Advance Accumulator to recover the loan, the deduction will automatically stop when the Vacation Advance Loan has been fully repaid. The amount of the last deduction will automatically be adjusted to exactly equal the loan balance stored in the Advance Accumulator.



You can also set up a Company-wide type I Deduction to take care of Vacation Advance Payback. Set the Vacation Advance Payback Deduction Amount to 100% in the Employee Record to automatically pay back the amount loaned as soon as possible. The employee's paychecks will be suppressed until the Vacation Advance is fully repaid via earned Vacation or other pay.



The Vacation Advance Payback Deduction will automatically stop when the Vacation Advance is fully repaid: if earnings exceed the balance of the Vacation Advance, the Deduction will be automatically be limited to the amount of the balance.



If you are already using the Advance Accumulator for another purpose, you can accomplish the same thing by using the Auxiliary Accumulator and codes S (for the loan) and Q (for the payback).

It is entirely possible that if the employee's pay is manually calculated prior to taking vacation time that the manually calculated pay will vary a few cents from the pay calculated by the computer. This does not necessarily indicate an error, since it may only be due to differences in methods of rounding, etc. Explain to employees that manually-figured vacation advances are estimated amounts and are subject to adjustment when the payroll is actually calculated by the computer.



If you underestimate net vacation pay, the payroll system will write the employee a small check in the payroll period the loan repayment is made. If you overestimate net vacation pay, the loan repayment will continue after the employee returns from vacation, and the amount of the overestimate will automatically be deducted from the next paycheck.



In either case, the employee receives all of the Vacation Pay due him: no more, and no less. When using this method, taxes are paid when the Vacation Pay is earned.



COST OF EXCESS GROUP LIFE INSURANCE is the premium dictated by current IRS regulations on "excess" company-paid life insurance. The amount of this premium is a FICA-only taxable item. You can establish a User-Defined category entitled "XS LIFE", Tax-Coded "B", with "NON-CASH" handling to include this amount on the employee's pay stub. You can either enter the dollar amount once a year, or automatically include the pro-rated amount of the premium each pay period by using one of the Auxiliary Pay items in the Employee Record.



MANSE ALLOWANCE for ministers may established as be a tax-exempt (Tax Code "C") User-Defined Pay Category with either REGULAR or NON-CASH handling, as appropriate to your situation. This amount may be automatically included in each paycheck by using one of the Auxiliary Pay items in the Employee Record to establish the amount of pay in this category.



VEHICLE USE is sometimes treated as a special component of pay, or may be a benefit. A User-Defined Pay Category can be set up to capture this item and tax it appropriately. Depending on your situation, either NON-CASH or REGULAR handling will be appropriate.



DEPENDENT CARE BENEFITS are sometimes treated more appropriately as a cash or non-cash pay component than as a deduction. Company Policy will usually dictate the appropriate method.



COMPANY CONTRIBUTIONS TO STOCK OR PENSION PLANS can be shown on the employee's pay stub by setting up a User-Defined Pay Category and including the amount of the company contribution in this category. These contributions would usually be set up as Tax Code "B", "C", or "D" with NON-CASH handling.



CAFETERIA PLAN BENEFITS may be taxed differently according to the choice of benefit, and may be cash or non-cash. User-Defined Pay Categories can be set up for each type of available benefit.



To automatically limit a combination of deductions to a total benefit amount, and allow the benefit to optionally be taken in cash: Set up a User-Defined Pay Category using REGULAR handling and a Tax Code which increases the Auxiliary Accumulator (Q,R,S, or T) and which causes the proper taxation of the benefit when taken in cash. The amount of this benefit may be automatically paid each pay period by using the Auxiliary Pay items in the Employee Record. Set up one or more deductions with Tax Codes which decrease the employee's Auxiliary Accumulator (Q,R,S, or T), and which cause the proper tax treatment for each benefit taken. The deductions will automatically be limited to the amount paid via the User-Defined Category.



WARNING: THE ABOVE EXAMPLES ARE INTENDED ONLY TO ILLUSTRATE PAYROLL FEATURES. SPECIFIC EXAMPLES MAY NOT BE APPLICABLE TO YOUR SITUATION, AND MAY NOT BE VALID DUE TO CHANGES OR LOCAL VARIATIONS IN TAX LAW. ALWAYS HAVE YOUR OWN TAX EXPERT VERIFY THAT YOUR PAYROLL IS SET UP PROPERLY FOR YOUR SPECIFIC SITUATION AT THE TIME YOU USE THE SYSTEM.





CORRECTING ERRORS



Always print an hours listing and compare it to your data input form. If you detect any errors you can re-enter or edit any employee individually, by employee number. In this case, ignore the system's warning that data has already been entered.

You may re-enter (under protest) hours data even if pay has been calculated. If you do this, you must re-calculate the employee's pay or incorrect results will be obtained. There is no limit to the number of times you may change hours and recalculate.

You may not re-enter hours if a check has been issued, which is indicated by a non-zero check number in the employee data record. If data must be re-entered or corrected for one or more employees after checks have been issued, you can "unlock" employee records by:



1. Selecting the Calculate function and Forcing

Recalculation of the affected employee records.



or 2. Setting the check number to zero using Manual Check.



This "duplicate check" interlock reduces the possibility that a payroll file could be changed in error after checks have been issued.



To avoid the possibility that duplicate checks have been issued for any other reason, check forms should always be pre-numbered; and check form usage should be reconciled with Payroll's Check Register. Once someone with the correct password "unlocks" an employee record, they will be allowed to access it again with the Periodic Entry program and print a new check.

IMPORTANT NOTE: To avoid "road blocking" the user when exceptions occur, the payroll system allows you to change anything in its database (although it may require special procedures such as the one above). In many cases, the system recognizes a request for processing as "unusual" and issues a warning message: but the warning can usually be overridden. With a payroll of any size, there are bound to be a few unusual conditions where the only reasonable thing to do is to change the numbers and "make it right". If you do make such changes, be sure you understand the effect they will have on your company books, your tax liability, and your government reporting requirements. The payroll system does what you tell it to do.



PAYROLL ADJUSTMENTS may have to be made manually if payments or deductions are made without using the payroll system. For example, if an employee is given a pay advance or loan in a form other than an amount on a regular paycheck, it will be necessary to manually update the employee's loan balance. This is done through the pay & deduction screen of the "Employee Data Entry and Modification" program.



Adjustments must be entered only into an Initialized Payroll File before any calculations have been done for the Current Period. You must recalculate the affected payroll records if you enter any Current-period adjustments after calculating the payroll. DO NOT enter adjustments after writing checks until you Initialize the Payroll File for the next period.