Payroll Advances

Payroll advances aren’t tracked automatically in AccountEdge, but you can still write advance checks for your employees and keep accurate payroll records. Follow these steps to distribute a payroll advance to an employee and record repayment of the advance.

Setup a Payroll Advance:

1. Create a Wage Category for the payroll advance. In the Payroll Command Center, click Payroll Categories to open the Payroll Category List window. Click the Wages tab in Payroll Categories List window and then click the New button. You can assign a separate expense account to track this advance, or you can leave it your regular payroll wage expense account. Just make sure the deduction for the employee's payback uses the same account.
2. Assign the wage for the payroll advance to the appropriate employee by clicking the Employee button at the bottom of the Wages Information window.
3. Click the Exempt button to review the options in the Wages Exemptions window. The wage category should be setup as nonexempt so that taxes are deducted from the check and employer expenses are calculated on the advance amount.
4. Create a Deduction Category for the advance repayment. In the Payroll Command Center, click Payroll Categories to open the Payroll Category List window. Click the Deductions tab in Payroll Categories List window and then click the New button. Indicate a User-entered Amount for Type of Deduction. Assign the same account that is assigned in the advance payment wage.
5. Assign the deduction to the appropriate employee by clicking the Employee button at the bottom of the Deductions Information window.
6. Click the Exempt button to review the options in the Deduction Exemptions window. The deduction category should be set up as an exempt deduction for all taxes so that the amount is deducted before any taxes are calculated.

Pay a Payroll Advance:

• Click on Process Payroll to process your regular payroll. On the '''Review and Edit Paychecks''' window, select the employee for which the advance is being paid by clicking on the arrow to the left of the employee's name. Enter the advance amount in the amount field using the wage you created for payroll advance in step. Be sure no other amounts appear in the Amounts fields for any other wages in the scrolling list. Deductions, employer expenses and taxes will be calculated automatically.

To Record Repayment of the Advance:

• Record the repayment on a paycheck. In Select and Edit Paychecks of Process Payroll, enter the advance repayment amount in the Amount field, using the Deduction Category you created for advance repayments in step 4. Enter the repayment amount as a negative number.