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Deduction/Earning Code File Maintenance

Deduction/Earning Code File Maintenance

Application Overview

 

The Deduction/Earning Code File maintains the file, which contains the deduction, and earnings codes you wish to use.

 

This file should contain all possible employee pay deductions and earnings other than wages, savings bond deductions, loan repayments, garnish payments, union payments, and withholding taxes.  Each deduction or earning must be assigned a unique two‑character code and a corresponding General Ledger account number (except for meals and allowances).  Each code must have a maximum amount that will be taken or added to the employee's wages.  If there is no maximum deduction or earning then enter 0 for this amount. 

 

All of the tax calculations are computed individually on each De­duction/Earning code.  Each Deduction/Earning code is established to be either exempt Y or N (if it's a earning) or included Y or N (if it's a deduction) for the calculation of various types of taxes.  These Y or N controls will determine the exact taxable base for each type (FWT, FICA, FUI, SUI, etc.) of payroll tax.  When a deduction code is entered, will be prompted with "Is This a Before Tax Deduction".  If you answer Y to this question then you will need to fill in the correct Y or N answer for each type of withholding tax.  If the answer is N, then all of the withholding tax computations should be flagged as N

 

For example:

 

A before tax deduction code for a pension plan may be included for the computation of FWT (to reduce the taxable base of FWT) but not for FICA, FUI, and others.  Likewise, after tax deduction code for a United Way contribution would not be included (the tax base would not be reduced) for any withholding tax computation.  It is advisable that you consult with your accountant or tax adviser to help in determining how each of your Deduction/Earning codes should affect the tax computation on each specific type of payroll tax.

 

Certain deductions are regularly taken:  weekly, monthly, etc.  These deductions may be entered directly onto the Employee File.  The com­puter will take these deductions automatically each specified pay period.  Regular deductions often include insurance, etc.  Regular periodic deductions for union, savings bonds, employer loans, and gar­nish payments do not need a deduction code since these are handled separately in the Employee File.  However, such deductions taken ran­domly would require their own deduction code.

 

Other deductions or earnings occur intermittently or differ in dollar amounts from period to period.  These irregular or temporary deductions/earnings are entered when the employee's time is entered in the Time Transaction Processing application.  A temporary deduction/earning will be included in the employee's pay for that pay period only.  Common tem­porary deductions or earnings include such things as uniform allow­ances, breakage fees, petty cash advances, supper allowances, etc.

 

Run Insturctions

 

Select Deduction/Earning Code File from the pull down PR Maintenance window.  The following screen will then be displayed:

 

 

Deduction/Earning Code File Entry Screen

 

 

 

 The following options are available:

 

*  Select the desired mode from the Deduction/Earning Code File menu bar

*  Enter the data requested on the screen

 

To return to the menu bar, press the ESC or F10 key. To leave this application, press X for EXIT when positioned at the menu bar.

 

Entry Field Descriptions

 

Name

Type and Description

1.  Code

2 alphanumeric characters.

 

Each type of deduction/earning used in the Payroll package must be given a unique two‑character code.  It is helpful to separate deductions and earnings types by recognizable codes.

 

e.g.  A1, A2 for allowances

     

D1, D2, D3 for deductions

     

E1, E2, E3 for earnings

 

M1, M2 for meals

 

T1, T2 for tips

 

In change and delete mode, press the F7 key to search for code.

2.  Description

7 alphanumeric characters.

 

This description appears on the screen when the Deduction/Earning code is entered.  It also appears on the check stub.

3.  Type

1 alphabetic character.

 

The Deduction/Earning Code File type may be one of five values (one of three for non‑restaurants).

 

These values are:

 

A   ‑   Taxable earning added to the employee's taxable gross wages but not added to net pay.

 

D   ‑   Deduction from either the employees net pay or as a reduction of each tax withholding basis.

Type (continued)

E   ‑   Earnings either added or not added to the employee's taxable gross wages.

 

R   -   Employee reimbursement.

 

For restaurants:

 

M   ‑   The taxable value of meals given the employee.

 

T   ‑   Tips received by the employee reported to the employer or tips paid to the employee by the employer. 

 

Meals (M) and Tips (T) are given special tax handling in accordance with federal regulations and are not added to or subtracted from net pay.

 

However, tips may be added to net pay if the Add Tips To Net Pay question is Y.

4.  G/L Acct No

An account number in the standard account number format.

 

This is the General Ledger account, which corresponds to the lia­bility/expense of the deduction/earning.  The General Ledger account may be entered only for earnings or deductions; not for allowances or meals, as they do not affect the transfer of funds in payroll other than to influence the magnitude of withholding liabilities.

 

In add mode, for allowances and meals, the General Ledger account field will be skipped entirely.

 

Note: For tips this account number will be used only if the Add Tips To Net Pay question is Y.

 

If the profit center and department account numbers of an earning is all 9's, then upon posting of the earning to the Payroll Distribution file, the main account from the number entered here will be used, along with the profit center and department from the em­ployee's wage account.  This can only be done for earnings E.

 

Pressing the F7 key will allow you to search for an account by number or pressing the F8 key will allow you to search for an account by description.

 

 

If the Type (field #3) is A, E, M, or T then the following fields apply:

 

Name

Type and Description

5.  Emp Exempt From Fica ?

Y or N.  

 

Answer Y if this earning is exempt from employee FICA contribution calculations.  The default value is N.

6.  Emplr Exempt From Fica ?

Y or N.

 

Answer Y if the employers FICA contribution is exempt from this earning. from the employer FICA contribution calculation.  The Default value is N.

7.  Exempt From Fwt ?

Y or N.

 

Answer Y if the employee FWT calculation is not to include this earning.  The default value is N.

8.  Exempt From Fui ?

Y or N.

 

Answer Y if the employer FUI tax calculation is not to include this earning.  The default value is N.

9.  Exempt From Swt ?

Y or N.

 

Answer Y if the employee State Withholding Tax is not to include this earning.  The default value is N.

10.  Exempt From Cwt?

Y or N.

 

Answer Y if this earning is not to be included in the employee City Withholding Tax.  The default value is N.

11.  Exempt From Ost ?

Y or N.

 

Answer Y if this earning is not to be included in any Other State Tax for the employee.  The default value is N.

 

12.  Exempt From Sui ?

Y or N.

 

Answer Y if this earning is exempt from the employer State Unemployment Insurance calculation.  The default value is N.

13.  Exempt From Eic ?

Y or N.

 

Answer Y if the earning is not to be included in the employee EIC calculation.  The default value is N.

14.  Exempt From W.C. ?

Y or N.

 

Answer Y if the earning is not to be included in the employer Workers Compensation calculation.  The default value is N.

 


If the Type (field #3) is an A or E the following fields apply:

 

Name

Type and Description

15. Maximum Amount

7 numeric digits with 2 decimal places (99,999.99).

 

Enter the maximum amount of the earnings that should be paid to the employee. If their is no maximum then this field should be left blank. The default value is 0.00.

16. Max Per Period or Year

Y or P.

 

If you select P the maximum amount is payment per pay period.

 

If you select Y the maximum amount is per year.

 

The default value is Y.

 

 

If the Type (field #3) is a T, then the following field applies.

 

Name

Type and Description

15.  Add Tips To Net Pay

Y or N.

 

Answer Y if the tips are to be added to the employee's net pay.  Also if the answer to this question is Y a G/L distribution record will be created for the tip amount added to net pay.

The default value is N.

 

 

If the Type (field #3) is a D then the following fields apply. 

 

Name

Type and Description

5.  Include For Emp Fica?

Y or N.

 

Answer this Y if the deduction should reduce the taxable base for the Employee calculation of FICA.  The default value is N.

6.  Include For Emplr Fica?

Y or N.

 

Answer this Y if the deduction should reduce the taxable base for the employer share of FICA.  The default value is N.

7.  Include For Fwt ?

Y or N.

 

Answer this Y if the deduction should reduce the employee federal tax withheld base for the tax-withheld computation.  The default value is N.

8.  Include for Fui ?

Y or N.

 

Answer Y if the deduction should reduce the taxable base for the federal unemployment insurance.

9.  Include For Swt ?

Y or N.

 

Answer Y if the deduction should reduce the taxable base for the employee state tax withheld.  

 

10.  Include For Cwt?

Y or N.

 

Answer this Y if the deduction should reduce the employee City Withholding Tax base.  The default value is N.

11.  Include For Ost?

Y or N.

 

Answer this Y if the deduction should reduce any Other State Tax to the employee.  The default value is N.

12.  Include For Sui ?

Y or N.

 

Answer this Y if the State Unemployment Tax base is to be reduced by the deduction.  The default value is N.     

13.  Include For Eic ?

Y or N.

 

Answer this Y if the employee EIC base is to be reduced by the deduction.  The Default value is N.  

14.  Include For W.C. ?

Y or N.

 

Answer Y if the employer Worker's Compensation Tax base should not include the deduction.  The default value is N.  

15.  Maximum Amount

7 numeric digits, with 2 decimal places (99,999.99).

 

Enter the maximum amount of the earning or deduction an employee can take. If their is no maximum then this field should be zero.  The default value is zero.

16.  Max Per Period or Year

Y or P.

 

If you select P the maximum amount is for payment period, or if you select Y the maximum amount is for year.

 

The default value is Y.

 

 

 

Date filled out________by__________ ADD    CHANGE    DELETE

 

           DEDUCTION/EARNING CODE FILE MAINTENANCE LOAD SHEET

 

1.  Code                       _ _

 

2.  Description               _ _ _ _ _ _ _

 

3.  Type                      _    D = Deduction E = Earning

                                   A = Allowance M = Meals T = Tips

 

4.  G/L Account #      _ _ _ _ _  _ _ _ ‑ _ _ _ _ _ _ _ _ - _ _ _ _ _ _ _ _

 

5.  Include For Emp FICA      _

 

6.  Include For Emplor FICA   _

 

7.  Include For FWT           _

 

8.  Include For FUI           _

 

9.  Include For SWT           _

 

10. Include For CWT           _

 

11. Include For OST           _

 

12. Include For SUI           _

 

13. Include For EIC           _

 

14. Include For W.C.          _

 

15. Maximum Amount            _ _ , _ _ _ . _ _

 

         or  

 

    Add Tips To Net Pay       _

 

16. Max Per Period or Year    _  (Y = Year, P = Per Period)

 

 

 

Date Entered________By_________ Date Verified__________by____________

 

 

 

 

Load Sheet

 

Deduction/Earning Code File Maintenance

 

 

                                   D E D U C T I O N   A N D   E A R N I N G   C O D E S   L I S T

 

Deduction/Earning Types:  D=Deduction A=Earning (NOt Added To Net) E=Earning (Added To Gross) M=MealS T=Tips

 

Code  Description  Type  Account‑No        Account Description              Maximum Amt   Taxable Flags

 

 99   insure        D   00025‑02345‑00000

                                                                                          Include For Emp Fica ?    Y

                                                                                          Include For Emplr Fica ?  Y

                                                                                          Include For Fwt ?         Y

                                                                                          Include For Fui ?         Y

                                                                                          Include For Swt ?         Y

                                                                                          Include For Cwt ?         Y

                                                                                          Include For Ost ?         Y

                                                                                          Include For Sui ?         Y

                                                                                          Include For Eic ?         Y

                                                                                          Include For W.C. ?        Y

                                                                                          Max Per Period Or Year ?  Y

 

 BC   Bluecrs       D   02250‑00000‑00000  Blue Cross Premiums Payable

                                                                                          Include For Emp Fica ?    N

                                                                                          Include For Emplr Fica ?  N

                                                                                          Include For Fwt ?         N

                                                                                          Include For Fui ?         N

                                                                                          Include For Swt ?         N

                                                                                          Include For Cwt ?         N

                                                                                          Include For Ost ?         N

 

 

 

 

 

 

 

 

 



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