US Payroll Setup
US Payroll Setup FAQ
This article will cover the proper initial setup for using the Payroll feature in AccountEdge for the US.
Using the payroll feature, you can:
- Process payroll for your employees
- Track, pay and report employee accruals and entitlements
- Pay accrued payroll liabilities
- Print pay stubs and paychecks
Before Using Payroll
Before you start using the payroll features, you need to:
Enter general payroll information
To enter General Payroll Information:
- Go to the top menu bar and select Setup > Payroll & 1099 Information
- Verify that all information here is accurate
- You are responsible for making sure the FUTA and SUI rates are updated when necessary
- Click Setup > Payroll Updates
- Click Load Tax Tables
Review payroll categoriesYou can review your payroll categories by going to:
- Lists > Payroll Categories from the menu bar at the top of the screen
- Click on the Payroll Category list (Wages, Deductions, etc) you want to review
Setting Up EmployeesYou'll need to create an employee card for each employee. On the employee's card, you'll store name, address and optional information, as well as payroll information. You'll start with setting the basic details and then the wage, deduction, expense and tax information. To create employee cards:
- Go to the top menu bar and select Lists > Cards to open the Cards List
- Click the Employee tab
- Click the New button and enter the employee's name and contact information
- Click on the Payroll Details tab
- Enter the Social Security #, Residence Code, Work Code, and other information that you have
- Click on the Wages link on the left-hand side of the window
- Enter the Pay Basis (as Salary or Hourly)
- Enter the Annual Salary or the Hourly rate
- Enter the Pay Frequency
- Enter the Hours per Pay Period
- AccountEdge Pro will have set a default wage expense account; change this only if there is a specific need
- Select the applicable wage categories by placing a tick to the left of the wage category
- Click on the Accruals link on the left-hand side of the window:
- Select the applicable accrual categories by placing a tick to the left of the accrual category
Adjusting Deduction Information
- Click on the Deductions link on the left-hand side of the window:
- Select the applicable deduction categories by placing a tick to the left of the deduction category
- Enter Deductions other than withholding taxes
- Click on the Employer Expenses link on the left-hand side of the window:
- Select the applicable expenses by placing a tick to the left of the expense category. AccountEdge Pro will have selected the default expenses. You'll just need to verify them.
- Click on the Taxes link on the left-hand side of the window
- Set the Marital Status, Allowances, and Extra Withheld for Federal
- Set the Allowances and Extra Withheld for State
- Verify AccountEdge Pro has selected the appropriate withholding taxes for the employee
- Click on the Recurring Pay link on the left-hand side of the window
- If the employee is Salaried, or if the employee is Hourly and you are not using TimeSheets, recurring payroll values can be indicated in this window.
- You can adjust the figures as necessary
- Click on the Time Billing link on the left-hand side of the window.
- Enter the appropriate Time-Billing rate for the employee. Use of this rate is determined by selection on the Activity profile.
Vacation/Holiday Pay EntitlementVacation/Holiday Pay Entitlement is implemented using two or more, payroll categories. One category is made as an Accrual and the other category is made as a Wage. For example you may have a “Vacation Pay 4%” Accrual and a “Vacation Pay” Wage. The accrual categories accrue the entitlement, which is paid out with the vacation pay wage category. The accruals are added to a liability account, and subtracted from that liability account as they are paid out. You may have more than one accrual category.
Configuring Vacation PayBoth the accrual and the wage paid out categories need to be associated with the employee (ticked). The vacation pay wage category is set up as a Hourly type of of wage even for salary employees. Usually the Pay Rate is set as the Regular Rate Multiplied by 1.0000 however you can change this as you want to. The option to Automatically Adjust Base Hourly or Base Salary Details can be checked if you pay out the vacation pay in replacement of their regular pay during vacation hours. If you pay your vacation pay during each pay period instead of just during a vacation, you most likely do not want to check this off. The Vacation Accrual category should be an Accrual type of payroll category. The Type of Accrual determines how much gets accrued and the Accrual Limit determines the maximum that can be accrued. The Linked Wages Category is where you select the Vacation Pay wage which when paid out will reduce the accrual balance. You can use the Exempt button to exclude wage categories before calculating the accrual amount. To set this up:
- Go to Lists > Card List from the menu bar at the top of the screen
- Select the Employee from the list.
- Click on the Wages link on the left-hand side of the window.
- Place a tick to the left of the vacation pay wage category to associate it with the employee.
- Click the arrow to the left of the vacation pay wage.
- Adjust the wage settings as needed (note that if you change anything about the wage category it will change it for all employees using that specific wage).
- Click OK when you are done adjusting the wage.
- Click on the Accruals link on the left-hand side of the window.
- Select the applicable accrual category by placing a tick to the left of the accrual category. This is the category used to calculate entitlement vacation pay.
- For each line, click in the Carry Over column if you need to add accrued amounts from a period before AccountEdge use. If, by agreement with your employees, the employees are to have accrued amounts available at a specific time such as first of the year, or an employee anniversary, you would add the amount in this window.
- Click the arrow to the left of the accrual category name to configure the accrual (note that if you change anything about the accrual category it will change it for all employees using that accrual).
- Set the Type of Accrual, Accrual Limit, and other details.
- Set the Linked Wages category as the vacation pay wage that when paid out will reduce the accrual balance.
- Click OK when you are complete
Paying Vacation Wages
If using timesheets, the vacation pay wage will appear as a line item; you could indicate the paid out hours on the timesheet. Whether you are using timesheets or not, the vacation pay wage will appear on the employee's stub.
When processing payroll in the Select and Edit Paycheck window, verify the vacation pay wage line item exists, and enter the hours (if desired), if not already entered. In any case, verify (or enter) the dollar amount you are paying out.
Paying the employee with the vacation pay wage category, will consume the value accrued by the vacation accrual.
Vacation Pay Accounting
The Accruals are expensed when they are paid. Both the employer and employee taxes are withheld when the accruals are paid out.
Add New Payroll Categories
To add a new payroll category:
- Go to your top menu bar and select Command Centers > Payroll > Payroll Categories
- Select the Category type you would like to add at the top (Wages, Accruals, Deductions, Expenses)
- Click the New button
- Follow the steps to create the new payroll category (ie: enter a name, make any selections)
- Make sure to click the Employee button at the bottom and assign the category to the employees it applies to
Paying Payroll Liabilities
Payroll liabilities comprise your employer expenses and amounts withheld from an employee's pay that must be paid to an appropriate authority or agency. Payroll liabilities are recorded when you process payroll. When you need to pay these amounts, you can use the Pay Liabilities feature.
To pay your payroll liabilities:
- Go to the Payroll module and click Pay Liabilities
- Specify how the payment is to be made. If you are paying the vendor electronically using Vendor Payments, select Group with Electronic Payments
- In the Pay from Account field, type or select the account you are making the payment from
- In the Vendor field, type or select the authority or agency to whom the withheld amount is being paid
- Select the type of liability you are paying from the Liability Type list. By default, all payroll categories for the selected liability type are included in the payment. If you do not want to include all payroll categories:
- Click the search icon in the Payroll Categories field
- Deselect categories by clicking in the select column next to each payroll category you want to exclude
- Click OK
- In the Dated From and the Dated To fields, type the period in which the payroll liabilities were withheld. The payroll liabilities withheld during the specified period appear in the Payroll Category section.
- Click in the select column next to the payroll liability amounts you want to include with this payment
- The total of the selected liabilities appears in the Total Payment field
- Click Record