Payroll Module: How to avoid crying while doing Payroll! LAURA HOFSTRAND DIOCESE OF DES MOINES

Transcription

1 Payroll Module: How to avoid crying while doing Payroll! LAURA HOFSTRAND DIOCESE OF DES MOINES

2 How to set up a new benefit/deduction What is the difference between a Benefit and Deduction?? Benefit: Is something that the PARISH/SCHOOL pays on behalf of the EMPLOYEE. A benefit does not affect the net pay an employee receives. An example would be Group Term Life Insurance, which is 100% paid by the Parish/School. You do not need to set up benefits in Payroll but it can make life easier when you issue checks to LMC, the IRS or Christian Brothers. For more information about setting up benefits, contact me. Deduction: Is something that is paid by the EMPLOYEE and withheld from their paycheck. An example would be the portion of the health insurance that the employee pays. Health insurance for example, has both a benefit and deduction portion to it. Part of the health insurance is paid by the Employee, and part is paid by the Parish/School.

3 How to set up a new benefit/deduction Go to the Payroll Module Click on Setup Click Deduction/Benefit List Click Add a New Deduction/Benefit from Template in the top left corner Click Select next to the appropriate benefit/deduction MAKE SURE YOU LOOK AT THE TYPE ARE YOU SETTING UP A BENEFIT OR A DEDUCTION?

4 How to set up a new benefit/deduction

5 Taxability of Deductions/Benefits After you have selected the appropriate deduction/benefit you might need to edit it. Click Edit next to the benefit/deduction you wish to change. You can change the description if needed. At the bottom of the page, you can change how taxes affect your benefit/deduction. ALL BENEFITS SHOULD HAVE NO TAX BOXES CHECKED! A benefit does not affect the taxes withheld or paid by an employee.

6 Taxability of Deductions/Benefits

7 Taxability of Deductions The following deductions should have ALL boxes checked: Health Insurance Dental Insurance Vision Insurance Flex Deductions Dependent Care Deductions Retirement (403b) deductions should have only Federal, State, and Local checked. Retirement contributions are subject to Social Security and Medicare taxes.

8 Taxability of Deductions All other deductions should have NO boxes checked: Voluntary Life Insurance Accident insurance Short Term Disability insurance Critical Illness Donations to the parish that an employee wants withheld from their check Tuition payments that an employee wants withheld from their check United Way or other contributions If you have a deduction that has not been listed please call me!

9 What happens to the money that I tell the system to withhold from an employee? Money that is withheld from an employee to be paid to another organization (ex. Insurance, retirement) should always go to a payroll liability account (Accounts ). How do I find out which account my withholdings are going to? Go to Setup in the Payroll Module Click on Account Distributions Under Quick Find, type in a payroll expense account that is used for an employee: (ex: Priests or Secretary ) The deductions are listed at the top and show which account each deduction is coded to.

10 What happens to the money that I tell the system to withhold from an employee?

11 What happens to the money that I tell the system to withhold from an employee? You need to check ALL payroll expense accounts that you use to make sure that each deduction is set up the same: i.e. look at Priests and you see that Retirement is coded to Then look at Secretary and make sure that Retirement is also coded to The ensures that all retirement withholding for all employees is going to the same withholding account. You will need to do this for all deductions that are you utilizing health, dental, vision, retirement, etc.

12 What happens to the money that I tell the system to withhold from an employee?

13 What happens to the money that I tell the system to withhold from an employee? After you have verified that all funds are going to the correct withholding account, go over to Ledger and Payables and pull up the following report: Reports>Accounts>Account Balance Type in the Account for #2030 View the activity Every pay period you should see an entry for every paycheck that has retirement set up. Every time you write a check to Christian Brothers you should code the portion of the check to #2030 that is withheld from an employee to clear out the balance.

14 What happens to the money that I tell the system to withhold from an employee?

15 Reconciling your Payroll Withholding Accounts In a perfect world every month the balance in accounts # #2050 would be $0. However the following would affect this: Do you pay your taxes quarterly? this means that tax withholding accounts will build up over three months and then clear out when you make the payment. Do you withhold insurance premiums over 12/24 pay periods or 26? This will affect the balance in the payroll withholding accounts for insurance. NOTE: I would recommend withholding insurance premiums over either 12 or 24 pay periods. If you withhold over 26, give me a call and we can talk about it.

16 Reconciling your Payroll Withholding Accounts Most Parishes/Schools are going to have a balance in their payroll withholding accounts at the end of the month. This is okay AS LONG AS YOU CAN EXPLAIN THE BALANCE Every month, you should review these withholding accounts to verify that payments are being made to the appropriate entities and that they are being coded correctly. If you reconcile the withholding accounts monthly, it will force you to stay on top of it. If you don t do it for several months it can be very difficult to find out what went wrong over those months.

17 Reconciling your Payroll Withholding Accounts There are many different scenarios in payroll and this presentation does not cover all of them. If you have any questions PLEASE CALL/ ME! I d love to chat about your situation and what we can do to get you reconciled regularly.

18 Any Questions??