Maintain Employee Information


The purpose of this process is to ensure employee records are accurately set up, and payroll information, including salary, benefits and tax data is entered and maintained accurately. There is a tremendous amount of information contained within the Employee record affecting their payroll.

Employee State Code

The Payroll System requires you to select a two-digit state code for each employee record. This code is important as it determines the proper calculation of some benefits and payroll taxes. Be sure you have selected the proper code for the employee. This code is based on the US Postal Service two digit state codes. This code is necessary to create multiple employee records for an employee who works in more than one state.

Basic Employee Information

See the the On-Line help for the Employee Maintenance program (menu# 3.1.1). When you create an employee record you enter their name and address in the Address Book, which is done when you add the employee. Other personnel information is maintained in the Employee record. This information is used to properly prepare and mail payroll checks, maintain employee and tax accumulation totals, and prepare salary and other reports. It is important this information be maintained on a regular basis. The Address Book entries MUST be correct in order to ensure the P/R checks and Federal W-2 forms are prepared properly.

The following additional explanations are provided for Employee information:

  1. Social Security Number - the system will not allow you to skip this field. If you do not have this data at the time you want to add the employee to the data base, you must wait until the information is received. If this information is not obtained, you should not process any of this employee's payroll data.
  2. Hire Date - this date has an effect on the accrual of Vacation and Sick pay. Both types of pay accrue for the whole month in which the employee is hired, no matter what day they are hired on.
  3. Term Date - this is the date an employee is terminated. This date also has an effect on the Vacation and Sick pay accruals, neither of which accrue for the month in which the employee terminates their employment.
  4. Pay Code - this field controls the display of payrates within the Wages Entry program (menu# 3.3.1).
  5. Pay Cycle - this code is used when calculating taxes by annualizing their wages prior to calculating federal taxes (see IRS Circular E, Tables for Percentage Method of Withholding). In addition, the cycle is used to convert wages to an hourly rate, which displays on the Wages Entry program (menu# as a default payrate.
  6. Client# - this number determines which client workers compensation rate is used. If the client doesn't have a separate workers compensation rate then the default rate is used. An employee can be used by multiple employers, meaning an employee can work for several of your clients but receive one payroll check. The tax records are maintained by tax identification number, so each employer can have the proper records.
  7. Pay Rate - this amount is used by the Wages Entry program to default the hourly rate. If the Pay Code is hourly the actual value is the default. If the Pay Code is salaried then the default hourly rate is calculated using the Pay Cycle code.

Employee Tax Withholding Information

The withholding and deduction information in an employee record will be obtained from the W-4, and other documents, submitted by the employee. A form should be submitted for both federal and state taxes if applicable. Once the appropriate information is submitted you can then change their withholdings or tax deductions.

The following is a more detailed explanation of the purpose of withholding information:

  1. Workers Compensation Code - this is an insurance company (or State) assigned code. This code has a percentage associated with it and is maintained in the PaytaxRate Maintenance program (menu# 3.2.2). The rate is used to calculate the premium based on regular pay, not on premium or other pay. e.g. if an employee works 6 hours of overtime, the wages paid will be for 9 hours (for time and a half) but only 6 hours will be used to calculate the workers compensation premium. For those states where other methods are used, a special program is used to make the computation of the premium. These states still use a class code and a rate, but don't base their premiums on the wages. The subroutine used is 'PAYWCOMP_StateCode' or 'PAYWCOMP_StateCode_Client#' (e.g. 'PAYWCOMP_WA' or 'PAYWCOMP_WA_675').
  2. Federal Increment - this value is used to increment, after calculating federal withholding, the federal tax for each employ each pay period. Remember, this amount is added to the calculated federal tax EACH PAY PERIOD.
  3. SUI Exempt - an 'EX' in this field will exempt an employee from paying state unemployment taxes, from either the employer or employee. Most states will exempt corporate officers or business owners from paying unemployment taxes. Note: this exemption triggers the maximun FUTA tax rate on an exempt employee.
  4. W/C Exempt - an 'EX' in this field will exempt an employee's employer from having to pay workers compensation premiums to an insurance company or the state.
  5. Vac Rate - this is the rate at which vacation pay accrues each month. It is a MONTHLY rate calculated in hours. e.g. if an employer grants two weeks of paid vacation each year to an employee then employees need to accumulate 80 hours per year or 6.66 hours per month. Note, however, all payroll accruals for vacation and sick pay are posted during the end-of-month update by the BASIC subroutine 'PAYACCRUALS'. This subroutine is also used to update paychecks issued each employee.
  6. Sick Rate - this is the rate at which sick pay accrues each month. It is a MONTHLY rate is calculated in hours. e.g. if an employer grants one day a month of paid vacation to an employee then employees need to accumulate 8 hours per month. Note, however, as with vacation pay, all payroll accruals for vacation and sick pay are posted during the end-of-month update by the BASIC subroutine 'PAYACCRUALS'. This subroutine is also used to update paychecks issued each employee.
  7. Vac Max - this is the maximum number of hours an employee can accrue in Vacation pay. Vacation pay is deducted from an employee's accruals prior to incrementing those accruals.
  8. Sick Max - this is the maximum number of hours an employee can accrue in Sick pay. As with Vacation pay, all Sick pay is deducted from the employee's accruals prior to monthly increments are processed.
  9. Deduction Types/Amounts - these are the special deduction codes for amounts are to be deducted from employee's NET pay. These deductions are maintained in the 'Tables,Paytbl' file with an id of (1 alpha and 1 numeric character e.g. D1, B1, etc). Deductions come in two forms; 1) before tax deductions, and 2) after tax deductions. To create a new Deduction Type, get to 'tcl' then enter the following:

    :u tables,paytbl 'DedType' P.DDESC P.DWTYPE P.DCALC

    The DedType is the actual type (1alpha,1numeric) and do enclose this value with the single quotes ('). Once the record is accessed, enter the description (field# 1) (16 characters max.). The withholding type (field# 2) determines if the deduction reduces gross pay before taxes are calculated. Options are:
    • 0 - Do not deduct from gross before calculating taxes.
    • 1 - Reduce gross for Income (Fed/State) taxes only. All other taxes are calculated on the actual gross pay.
    • 2 - Reduce gross by the deduction amount before calculating ALL taxes.
    The calculation type (field# 3) determines how the deduction amount is calculated; blank = dollar amount, 1 = percent of taxable gross.

Delete an Employee Record

Records of employees terminated during the year should be maintained on the system until after year-end reporting and updating is completed. Some employees may be seasonal and should be maintained on the system from year-to- year, not deleted and added every year.

Add and Maintain Salary Data

The Payroll System allows you to pay employees on either an hourly or salaried basis, or a combination of both. In order to process salaried information you need to maintain a separate salary record. Since a salary record is selected for a supplemental wage creation run, make sure the amount of the salary corresponds to the correct employee PayCycle as recorded in their employee file.

You can allocate any salary to a maximum of 10 different clients or G/L account#s. Because changing a payrate also may change the employee salary file, you must have sufficient security clearance to take this action.

Since the number of hours in a pay period fluctuate, you need to allocate each line item in the salary record as a percentage of the hours processed.

Special Notes:

Please note the following:

  1. The ACCT/AMOUNT columns are dependent on the Client# column. For each Client# you enter you must also enter an ACCT and an AMOUNT.
  2. When you delete an employee this file record is also deleted. Also, when you alter an employees payrate in the employee file, this record will be altered.
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