Pay Statement Types
Pay Statement Types let you define the criteria that the system uses to handle each Pay Statement Type during payroll processing. To use them, create a Pay Statement Type for each potential scenario you might need in payroll processing. Access this option at Company Settings > Payroll Setup > Pay Statement Types.
The system includes several default Pay Statement Types, such as 3rd Party Sick, Bonus, Void, Regular, Historical, and so on.
Adding a New Pay Statement Type
To add a new Pay Statement Type, begin with these three steps and then complete the sections and fields described in the next sections:
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Navigate to Company Settings > Payroll Setup > Pay Statement Types.
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Click the Add New button. The system displays a Question box where you select the category for your new Pay Statement Type.
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Select the category and click the OK button.
Pay Statement Type Section
Fill out the Pay Statement Type section.
Complete the following sections and fields:
Category: This field is based on the category you selected and cannot be edited.
Name: Enter a name for the Pay Statement Type.
Description: Optionally, enter a brief description for the Pay Statement Type.
Active: Uncheck the Active box to inactivate this Pay Statement Type.
Show PSTs To Employee: Uncheck to prevent employees from viewing Pay Statements of this type.
Display Order: This field controls the display order of the Pay Statement Type in drop-down menus, etc.
Pay Order: System [Number] Sub-Order [Number]: Pay Order controls the order in which Pay Statements are calculated for the purposes of wage limits, year to date accumulators, etc. Pay Order is grayed out because it is system controlled and can't be changed. Sub-Order allows you to sort similar Pay Statement Types in a specific order for pay calculation. For example, you might want Regular Pay Statements to calculate before Bonus Pay Statements so that the YTD bonus does not display on the Regular Pay Statement.
Pay Statement Defaults Section
Fill out the Pay Statement Defaults section.
Complete the following sections and fields:
Scheduled: Check this box if this Pay Statement Type is considered scheduled, and therefore scheduled earnings and deductions set for a frequency of Every Scheduled Pay should be applied to this Pay Statement Type.
Can Deliver: Uncheck this box if this Pay Statement Type should not be delivered with payroll.
Block Direct Deposit: Check this box if all direct deposits should be blocked.
Block Direct Deposit Except Net (All But ‘Entire/Remainder’: Check this box if all direct deposits should be blocked except for those marked as Entire/Remainder.
Block Hours-Based Accruals: Check this box to ensure that accruals will not consider this Pay Statement Type for calculation of accruals.
Block Auto Labor Allocation: Check this box if you do not want to apply the Labor Distribution Profile for an employee when using this Pay Statement Type.
Blocked Scheduled Earnings: Check this box if you don't want scheduled earnings to apply to this Pay Statement Type.
Block Base Compensation: Check this box if you don't want base compensation to be added to this Pay Statement Type.
Block Scheduled Deductions EE: Uncheck this box to include scheduled employee (EE) deductions in this Pay Statement Type.
Block Scheduled Deductions ER: Uncheck this box to include scheduled employer (ER) deductions in this Pay Statement Type.
Block Deductions Recovery (Arrears and Adjustments): Check this box to block deduction recovery for arrears and adjustments from this Pay Statement Type.
Block All Taxes: Check this box to block all employee (EE) taxes from this Pay Statement Type.
Block All Taxes (ER): Check this box to block all employer (ER) taxes from this Pay Statement Type.
Block All Additional Withholdings: Check this box to block all additional withholding for employees from this Pay Statement Type.
Tax Frequency Override: Select an option from the drop-down list if you want to override the tax frequency for this Pay Statement Type.
Tax Engine: This option is currently not used and should always be set to Default. This option will be used in the future if the system supports multiple tax engines.
Heightened Security: Check this box if this Pay Statement Type falls under heightened security and users should be restricted from editing or deleting the Pay Statement Type. Only users assigned to a security profile with the security item for Heightened Security enabled (Pay Statements items in the Payroll section on the Payroll tab) can edit or delete this Pay Statement Type.
Keep Even If Pay Statement is Empty: Check this box if the pay statement should be kept even if containing no data. This prevents the pay statement from being automatically deleted during payroll processing.
Block Direct Deposit Reversal Option
An option to Block Direct Deposit Reversal is available in the Pay Statement Defaults section of the Void Pay Statement Type. When you check this check box, the systems blocks direct deposits on a Void pay statement.
The voided Pay Statement itself inherits the setting of the Block Direct Deposit Reversal option from the Pay Statement Type. You can override the setting in the Void Reversal Settings in Utilities > Void Options from the Edit Pay Statement page for a Void Pay Statement.
You can apply Block Direct Deposit Reversal to multiple Pay Statements at once via Mass Edit under Team > Payroll > Process Payroll > View/Edit Employee Statements > Utilities > Mass Edit Selected Pay Statements.
When you enable the Block Direct Deposit Reversal option and select a Void pay statement that includes direct deposits, the system enables the Block Direct Deposit Reversals option in Edit Pay Statement > Utilities > Options. If you check the Clear option for the Block Direct Deposit Reversals option, the system disables the Block Direct Deposit Reversals option in Edit Pay Statement > Utilities > Options.
If you check the Block Direct Deposit Reversals option or the Clear option for Block Direct Deposit Reversal and you select a Void pay statement that does not contain direct deposits, the system makes no updates.
The Payroll Alerts section shows existing alerts. To add more alerts, click the Add Payroll Alert button.
In the Tax Settings window, you can configure new tax calculations. Click Add Tax Setting to add a setting, and click Delete Tax Setting to delete a setting.
After you click the Add Tax Setting button, a Question window appears. Configure the following options, and click the Select Taxes button.
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FIT/SIT Override [Type]: Select either a $ or % symbol to apply to the next field.
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FIT/SIT Block Additional: Check this box to block all additional employee Federal and State withholding taxes from this Pay Statement Type.
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Blocks: Check the boxes for the employee (EE) and employer (ER) wages and taxes that you want the system to block from the calculation or withholding. EE/ER applies to taxes for the employee and employer. GW applies to Gross Wages, GSW applies to Gross Subject Wages, and SW applies to Subject Wages for both the EE and ER.
After you click the Select Taxes button, the New Pay Statement Type Tax Setting window appears so that you can select tax settings. Check the boxes you want, and click the Add Selected Taxes button.
After you select taxes, they will appear in the main Tax Settings window.
Payroll Adjustment Pay Statement Type
In the Payroll Adjustment pay statement type, you can enter negative amounts in any way you require.
Use this Pay Statement type for all payroll adjustments that contain negative amounts. You can't enter negative amounts into any other Pay Statement Types when you're not summing to a positive result per Earnings Type and location. But you can enter negative amounts in other Pay Statement Types (other than Manual Adjustments) when the amounts sum to a positive per Earning Type and location.
When a Pay Statement contains multiple regular earnings for the same location, the system sums together these earnings before it sends them to the tax engine. If this summed amount is zero or greater, the calculation will be performed correctly.
It is not necessary for each individual line to be zero or greater, as long as the sum of all regular earnings in each location is zero or greater. The same logic holds true for bonus earnings. However, different Custom Earnings Types cannot be summed together in this same fashion.
The following situations will generate an error:
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The sum of all Regular earning types in any location is negative.
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The sum of all Bonus earning types in any location is negative.
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The sum of any single Custom earning type in any location is negative.
The Payroll Adjustment pay statement type works in a similar manner to the Historical pay statement, but with the following differences:
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There is no tax calculation or calculated values of any kind. No taxable wage accumulators are updated unless you enter them in the Manual Adjustment pay statement type.
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The only values in the Pay Statement are those you enter. Therefore, you should be very certain of all the amounts entered. If you leave fields blank, the system does not verify or validate whether you fill in any missing data.
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The Payroll Adjustment Pay Statement Type does not allow a net pay that is not equal to zero. In other words, earnings, deductions, and taxes must all sum up to zero ($.00).
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If a net check is required, you need to create a Manual Pay Statement to process the net pay amount.
All entries on the Payroll Adjustment pay statement type will update YTD numbers in the system.
If you make a change to certain tax records on a Payroll Adjustment pay statement that adjusts the gross, subject, or gross subject wages, this does not affect future calculations. The system does not resend calculated gross, subject, or gross subject wages to the tax engine for certain taxes. YTD wages go to the tax engine when you sum all previous earnings records.
Because of this, when you look at the YTD wages for certain taxes (most notably SUTA) in reports, you might see numbers that are slightly different from the numbers that the calculations appear to be based on. This is expected.
If you need to correct future calculations, you may need to reflect these changes with earning records.
If Auto Correct Tax Amounts is turned ON at either the company or the employee level, this might undo any Manual Adjustments you make.
If you enter a negative that results in the YTD for that earnings type in that location to go negative, the system accepts the manual adjustment.
Payroll Adjustment pay statements have specific security settings under Company Settings > Profiles/Policies > Security on the Payroll section of the Payroll tab.
Manual Adjustments show up in reports separate from other Pay Statement Types.
Processing Negative Wage or Tax Amounts
Remember the following processing rules when you process payrolls with negative wage or tax amounts.
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You can enter negative wages when you edit all Pay Statements, as long as the amounts sum to a positive per earnings type and location. For example, if you have two regular earnings and need to move wages between them while keeping the same location, you can do that.
However, you can't move the wages to another location or to a different Earnings Type. Also, you can't combine a Custom earnings type with any other Custom earnings type. All Regular earnings types can be combined with each other, all Bonuses can be combined with each other, and so on.
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If you enter a negative amount, which causes the YTD for that earnings type in that location to go negative, you will have issues with processing the next Pay Statement and a warning will tell you that all Earning Types must net to a positive amount per address.
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The system does not allow you to enter negative wages that do not sum to a positive per Earnings Type and location in a Pay Statement. If you try this, you receive an error to tell you that all earning types must net to a positive amount because the tax engine cannot accept negative wages.
Payroll Alert for FUTA/SUTA Wage Base Due to Voided Pay Statements
The system includes a Payroll Alert to monitor the pay statement wages for FUTA, SUTA, and SUI against the taxable wage bases.
The Payroll Alert is named Needs Recon/Adjustment. You use this alert to address a situation where the YTD Subject Wages and YTD Employer Amount are incorrect after a Pay Statement has been voided. This alert also lets you know when the tax rate changes after the first payroll of the year.
Add this alert to the Regular and Supplemental pay statement types to monitor the FUTA, SUTA, or SUI wages against the UI Wage Bases (a system-maintained table) at the time of processing of the Pay Statement. The alert appears under the following conditions:
The alert appears when both of the following are true:
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The YTD Gross Subject Wage meets or exceeds the UI Wage Base.
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The YTD Subject Wage is less than the UI Wage Base.
The alert also uses the following test:
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First, calculate the Corrected YTD Subject Wage as the lesser of UI Wage Base and YTD Gross Subject Wage.
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Next, calculate the Corrected YTD Amount as the Corrected YTD Subject Wage X Tax Rate.
Note: For SUI tax codes, the system uses the Tax Rate for Reporting value. For Pennsylvania SUI, you must provide the Tax Rate for Reporting in order to trigger this alert. For Alaska and New Jersey SUI tax codes, if the Tax Rate for Reporting is not used, the employee rate (EE Rate) will be used. The Tax Rate for Reporting (%) field is located in the Tax Settings section of the SUI tax code. -
Then, calculate the Actual Variance between the Corrected YTD Amount and YTD Amount.
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Trigger the alert if the Actual Variance exceeds the Allowable Variance.
As with other Payroll Alerts, if Sign-Off is required, you can't close the payroll until you mark the alert as completed.
Creating an Alert
When you select the Needs Recon/Adjustment alert, an entry field appears for you to select the appropriate tax. The tax list includes only FUTA, SUTA, and SUI taxes. The best practice is to add this alert to Regular and Supplemental pay statement types. Do not add it to the Void or Reconciliation pay statements.
The process to create another type of alert is similar to the following steps.
To create this alert, navigate to Company Settings > Payroll Setup > Pay Statement Types. In the Payroll Alerts section, select the Add Payroll Alert button.
Payroll To Notify: Select which payrolls this alert will be used to notify.
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All: Will be used to notify all payrolls.
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All Until: Will be used to notify payrolls until the date specified.
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All After: Will be used to notify payrolls after the date specified.
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Specific Date: Will be used to notify a specific payroll according to the date listed.
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Next X Payroll: Will be used to notify X number of the next payrolls.
Active: Uncheck to deactivate the alert.
Require Sign-Off: Check to require the alert to be marked as reviewed/completed.
Label: Enter a name for the alert to display during payroll processing.
Alert: Enter the description information for the alert to display during payroll processing.
Conditional Filter: To enable the alert to apply in only certain conditions, add filters. You can add multiple filters. You can use the And/Or/Not operands to include or exclude multiple entries. You can use Delete to remove a filter.
In the Conditional Filter section, click the ADD button.
Select the Needs Recon/Adjustment filter from the Filters list.
Select the PST Tax for Recon/Adjustment Monitoring (only FUTA, SUTA, and SUI taxes are selectable).
Select OR to add the alert condition with a different tax so that you can monitor multiple taxes with the same alert.
You can add multiple Needs Recon/Adjustment alerts to the same pay statement. Adding separate alerts can provide an alert message specific to each selected tax.