Classic - Payroll – Successware Help

Introduction

The Successware Payroll Manager allows you to maintain and post timecard entries, other earnings, and employer expenses into Successware. Once employee wages have been paid, you will use the reconcile feature to balance your actual payroll to the original gross wages by recording net wages, deductions and additional expenses. Successware will generate and post journal entries to reflect these totals.

Earnings are entered as timecard entries or as miscellaneous wages. You will prepare, verify, and post them in the Payroll Manager.

If you are using the interface with QuickBooks Pro, you will export gross wage information from Successware into QuickBooks. QuickBooks will calculate the net wages and generate checks for your employees. You can then import the reconciliation information back into the Successware Payroll Manager.
If you are using an outside payroll service or other third party software to calculate taxes and generate checks, you will obtain reports from the other source and use the information to manually enter the reconciliation information in Successware.

After the reconciliation information has been imported or manually entered, you will post the reconciliation that will update the General Ledger with the actual payroll entries.

Accounting Flow

Where do the transactions post?

Earnings

All earnings are entered using Pay Items. You will add pay items while setting up Payroll. A pay item consists of a code and description and also determines the pay type (hourly, salary, piece rate or commission), whether the earnings are job related or not, whether the earnings should factor into overtime calculations, and where the earnings expense should post in the general ledger.

Sample Pay Items

The expense type you have selected for the pay item defines the general ledger account. You will set up an expense type for every general ledger account you wish to affect with gross pay. You will have some expense types for direct costs (above the line) and others for operating expenses (below the line.) The department will default to the job’s department for job related transactions. You will select the desired department for non job-related transactions.

Whether you are entering earnings in the timecard manager or as miscellaneous wages, or the earnings are generated automatically for salaried employees, it is the pay item that will determine where to post in general ledger.

How is the Pay Item assigned?

When entering miscellaneous wages you will select which pay item to use for each line item.

Salaried earnings are set up on each salaried employee.

Timecard entries are automated. When setting up payroll you will select an hourly pay item to use as the Standard Labor (default) pay item. You will select the pay item that will be used most often for hourly timecard entries. When you complete call progress the system creates timecard entries for “dispatched”, the time segment from dispatched to onsite, and “onsite”, the time segment between on-site and completed. When the entry is created, the system will look at payroll setup to determine what the pay item should be.

What if you want to use a different pay item for some jobs? You can select a pay item for each job/call type. If a job/call type includes a pay item, that pay item will be used rather than the standard labor pay item. Open the job/call type reference library table to add pay items to the job/call types that you wish to post differently. You DO NOT need to select a pay item for job/call types that should post to the standard labor (default) pay item.

Is there any other way to use a different pay item for hourly timecard entries? Yes. A pay item assigned to a timecard status code will override the job/call type pay item. For instance, if you want to charge travel time to a different account, you can change the timecard status code of “dispatched” to use a pay item for travel time. Just remember that ALL “dispatched” timecard items will post based on that pay item.

To review:

Timecard Entries

Job Related timecard entries look at the timecard status for a pay item. If there is no pay item, the system will look at the job/call type to see if there is a pay item there. If not, the system will look at payroll setup to find the standard labor pay item.

Non-job related timecard entries look at the timecard status for a pay item. If there is no pay item, the system will look at payroll setup to find the standard labor pay item.

Miscellaneous Wages

When entering miscellaneous wages you will select the desired pay item for each entry.

Salaried Earnings

You have two options for expensing salaries when setting up salaried employees. You can expense salaries using timecard entries or salary splits.

You can use timecard entries to determine where to post earnings on employees for whom you schedule and track call progress through the call center but pay a salary. As you dispatch and enter on-site and completed times for jobs, the system creates timecard entries whether the employee is paid based on timecard entries or not. You can take advantage of that feature to split a salaried employee’s earnings. For instance, if 20% of his timecard entries are for direct cost and department 21, 20% of his salary will post to direct cost and department 21. Using timecard entries to determine the split will ensure that the employee’s earnings are always split based on where he or she worked. This method is NOT recommended for employees that have very little timecard activity. For instance, if you have a manager that spends most of his time in the office but maybe spent 8 hours at a jobsite, you would not want his entire salary to be split based on those 8 hours.

Using Salary splits allows you to predetermine where the employee’s salary will post every pay period. You can use any combination of pay items and departments to split the salary by percentage. For instance, you may want all earnings to post to the same pay item but split them departmentally.

You may split the salary by pay item.

Or, you may want all earnings to post the same.

When posting the gross payroll expense from earnings, the system will offset the entries with Accrued Payroll. You will select the liability account to use for accrued payroll when you set up general ledger default accounts.

Deductions and Other Employer Expenses

You will determine where deductions and other employer expenses will post when setting up payroll.

When setting up the GL tab of payroll setup, you will list all deductions and other expenses and indicate whether they are deductions, expenses, or both. For instance FICA (Social Security) is both deducted from each employee’s paycheck and an expense to the employer. You will also enter the general ledger account or accounts you wish to affect when the payroll reconciliation is posted.

For employer expenses, you will enter both the liability account that you will use to accrue the expense and the actual expense. There are fields for sub accounts when using accounts for which there are sub accounts.

Sample Deductions & Employer Expenses

If you are using sub accounts you must enter a deduction or expense for each sub account. Notice in the example above that there is an Employee Receivable for Fred and Jim. The EmpeAcct (Employee Account) is the same but the appropriate sub accounts have been entered in the next field.

Deductions may post to a liability account as an accrual. However, in some cases, you may wish to reduce an expense with the deduction (such as employee reimbursement for expenses or employee portion of uniforms or insurance.)

Deductions and Expenses that your company is responsible for administering are considered to be Employer Managed. That column is provided for companies using a payroll service to indicate which items they are responsible for and which ones are handled by their payroll service. If you are using the interface to QuickBooks Pro, all items will be Employer Managed.

Deductions that are not Employer Managed will not update the General Ledger when the reconciliation is posted. An example of a deduction that is typically not employer managed is Federal Withholding. Since the payroll service withholds the deduction and reports it to the IRS, it never accrues nor has to be paid out of your general ledger.

Employer Expenses that are not Employer Managed will update the General Ledger expense account only. The Employee and Employer liability accounts will not be updated. An example of an expense that is typically not employer managed is the employer’s portion of FICA and Medicare. Since the payroll service withholds the deduction, accrues the employer’s portion, and reports it to the IRS, it never accrues nor has to be paid out of your general ledger. The expense for the employer’s portion will be posted.

Checks/Disbursements

The system uses information in the Payroll Check or Disbursements tab of the payroll reconciliation to determine how to post net pay.

If you are using the QuickBooks Pro interface, you will import the net checks and actual deductions and expenses to post in Successware.
If you are creating paychecks in a different software package, you will manually enter net checks and actual deductions and expenses.
If you are using an outside payroll service, you will manually enter the disbursements, as they will appear on your bank statement, and the actual deductions and expenses.

The deductions and expenses will post as described in the previous section. Checks or disbursements will post to the general ledger account and register account that is selected when you post the reconciliation.

When setting up payroll you will select a register account and mark it as “default payroll account”. That register will display as the Payroll Bank Account in payroll reconciliation. You can select a different account if necessary.

The system will offset the reconciling entries with accrued payroll (zeroing out the account.)

Payroll Setup

Before you can activate and use the Successware Payroll module there are four elements of setup that must be completed.

General Ledger Setup for Payroll
The Payroll Register Account
The Payroll Setup Screens
Employee Setup

Payroll Setup - General Ledger Setup for Payroll

Prior to completing the payroll setup, you must verify that your General Ledger includes the accounts that will be used for processing payroll and that the appropriate accounts are selected as the payroll default accounts.

Note: Each payroll default type must have an account. This includes the Estimated Labor Burden type, even if you do not plan to use Estimated Labor Burden.

The default accounts that pertain to payroll are:

Payroll Accrued– The system will post payroll to this liability account until the reconciliation is performed.
Payroll Est. Labor Burden– At the time that the payroll period is posted the system will post (debit) the Estimated Labor Burden to this account if you select post labor burden to the default ELB account.
Payroll Burden Applied– At the time that the payroll period is reconciled, the system will post (credit) the total Estimated Labor Burden to this account if you select post labor burden to G/L as indicated by pay items.

To set your payroll related default general ledger accounts:

Select the 21 Button on the toolbar to open the Main Menu.
Click the Setup button.
Click the General Ledger button and select the Default Accounts tab.
Select the Default type listed on the left. The three Payroll related default types begin with Payroll.
In the right panel, double click on the account that you want to use as the default account for this transaction type.
Click OK to confirm the selection of the account and notified that once the account carries a balance it will not be able to be changed.

Payroll Setup - The Payroll Register Account

If you intend to process payroll through Successware you must designate a default bank account that will be used to write paychecks or to pay your payroll service. The account chosen can be an existing bank account (note that a cash box account cannot be designated the default payroll account) or you can add a new account to the Account Register.

Adding a New Account to the Account Register

The account you intend to use to write payroll checks or to make payment to your payroll company must be listed both in your general ledger and in your Account Register. If the account is not listed in your account register it must be added. To add the account:

Access the Main Menu and click Setup and then Reference Library. When the next screen appears, select Accounting found in the Volumes column, and then double-click on Register Accounts. When the Register Accounts table appears click Open.
Press Ctrl+Enter to open the Reference Library book in edit mode.

Click New and fill in the following fields:

Field Name	Description
Register Account#	This is the code you use to identify the account. You can use the General Ledger account number or the actual bank account number.
Description	The description of the account.
Active	Verify that this field is marked to indicate that the account is active.
Account Type	Select Bank.
GL Account & Sub Account	Enter the correct General Ledger account (and sub account if appropriate) or select the account from the drop-down list.
Default Payroll Account	Select this checkbox to indicate that the account is a default payroll account.

Click Save, and then Close when finished.

Marking an Existing Account as Your Default Payroll Account

If you are using an existing bank account for payroll checks, you must edit the account to indicate that it is your default payroll account.

To Edit the Account:

Access the Main Menu and click Setup and then Reference Library. When the next screen appears, select Accounting found in the Volumes column, and then double-click on Register Accounts. When the Register Accounts table appears click Open.
Press Ctrl+Enter to open the Reference Library book in edit mode.
Use the arrow buttons at the bottom of the form to locate the correct account.
Click Edit.
Use the spacebar or mouse to mark the Default Payroll Account checkbox.
Click Save, and then Close.

Payroll Setup - The Payroll Setup Screens

You will use the Payroll Setup screen to complete the Payroll setup options. In the Payroll Setup screen you will complete the following elements of Payroll setup:

Payroll Periods
Pay Items
Deductions and Additional Employer Expenses
Payroll Service Disbursements (If you are using a payroll service)
Overtime Setup
Handling of Non-Timecard Entries
Payroll Premiums
Labor Burden Setup
Payroll Import/Export Options
Miscellaneous Payroll Setup required for Individual States

To Access Payroll setup:

Select the 21 Icon from the toolbar to open the Main Menu.
Click the Setup button and then the Payroll button.

Note: You may need to use the Edit and Save buttons at the bottom of the form to access certain options in the payroll setup windows.

Payroll Periods Tab

On the Payroll Periods tab, you will indicate the type of payroll periods your company uses by checking the boxes. You may use any combination of weekly, biweekly, monthly, and semimonthly pay periods, but you can have only one setup, which will apply to all periods.

You will also use the Payroll Periods tab to indicate whether or not you are using an outside payroll service to process your payroll, and if so, how should the payment to the service be processed.

Payroll Periods

Weekly periods consist of seven days and end each week on the same day. If your company uses weekly periods, check the ‘Use weekly periods’ checkbox and indicate the day of the week your weekly period ends.

Biweekly periods consist of fourteen days and end every other week on the same day. If your company uses biweekly periods, check the ‘Use biweekly periods’ checkbox and indicate the day of the week your biweekly period ends.

Monthly periods consist of a different number of days for each period (depending on the month) and end on the same day for each month. If your company uses monthly periods, check the ‘Use monthly periods’ checkbox and indicate the day of the month (1-31) on which your monthly period ends. If you select the 29^th, 30^th, or 31^st, the monthly period will end on that day for months that have that date, or the last day of the month for months that do not contain that date.

Semimonthly periods also contain a different number of days for each period. These periods end twice a month on the same days. If your company uses semimonthly periods, check the ‘Use semimonthly periods’ checkbox. Indicate the days of the month on which your semimonthly period ends. The first day must be between 1 and 15, and the second between 16 and 31. If the second end day is the 29^th, 30^th, or 31^st, the semimonthly period will end on that day for months that have that date, or the last day of the month for months that do not contain that date.

Payroll Service

If you use an outside payroll service, check the check box labeled ‘Use P/R Service’, and then enter the name of your payroll service. This is used as the default “Pay To” for the posted check or debit that will result when you make payment to the payroll service.

Additionally, you will need to select whether you want reconciliation to automatically post the disbursement(s) as miscellaneous payments to the account register.

If you choose to automatically post the payment, the system will automatically record a miscellaneous check or debit in the account register when you post the reconciliation of your payroll period.

If the option is not selected, you will need to manually record the miscellaneous check, or set up the service as a vendor and pay the service through the normal AP invoice/payment process. If you manually post this payment, you must be sure to reference the proper General Ledger accounts to record taxes or additional expenses as well as clear accrued payroll.

Lastly, select whether payment is made to the payroll service using either check or debit.

General Ledger (G/L) Tab

Pay Items

Pay Items consist of a code, description, and expense type. Pay Items are utilized in the following manner:

Indicate pay rate & labor expense type on timecard entries.
Indicate labor expense type on miscellaneous wage entries.
Control the employee wage summary grouping when preparing payroll.
To optionally define multiple pay rates for employees (by pay item).
To automate variable pay rates and labor expensing when recording timecard entries and miscellaneous wages for jobs.
To specify GL accounts when posting labor expenses.

The Pay Items table consists of a Code, Description and an Expense Type. The Expense Type will determine to which account the labor expenses for the Pay Item will post in the General Ledger. If you have not set up an Expense Type for the item you are adding, you can use the Quick Add feature of Successware to add it from the Pay Item list. You will also define the pay type for each item and whether the item is job related and/or should be treated as “regular” pay.

Field	Description
PayItemCode	Enter a unique code for the item.
Description	Enter a unique description for the item.
PayType	Use the drop-down menu to select the appropriate pay type. Salary- these items are used to define salary splits in employee setup. Hourly- these items are used when making timecard entries and miscellaneous wages. They are also used when defining default pay items on Job/Call types and pay rates in employee setup. Piecerate- these items are used when entering piece rate and miscellaneous wages. Commission- these items are used when recording commissions for a job.
JobRelated	Place an X in this column to indicate that the pay item is job related. Pay items that are marked, as job related will require a job number when used in timecard or other wage entries.
RegOT	Place an X in this column to indicate that the pay item is treated as regular time. “Regular time” timecard entries will accumulate toward automatic overtime and will also be used in the calculation of the regular rate and overtime rate for a given period. DO NOT select RegOT on Pay Items such as Vacations and Holidays or timecard entries created with these Pay Items will count toward overtime.
ExpenseType	Enter or select the appropriate Expense Type for the pay item. The Expense Type will determine where labor expense will post in the General Ledger.
Is Active	Verify that this column is selected to indicate that the item is active.

Note: Hourly, job-related, pay items will automatically be added to the PriceBook as labor items. This will allow you to maintain the sale price for the specified type of labor.

Standard Labor Pay Item

The Standard Labor Pay Item will be used as the default pay item on timecard entries when no other pay item is specified. This standard labor item must be an ‘hourly’ item.

Deductions and Additional Employer Expenses

Deductions and Additional Employer Expenses consist of a description and three General Ledger account/sub account combinations. Use these items to define payroll deductions, employer accruals, and expenses such as income tax, unemployment taxes, 401k, group insurance, etc.

Field	Descriptions
Description	Enter a unique description for the item.
IsDeduction	Type an X in this field to indicate that the item is deducted from employee earnings. When this field is marked, you will be required to enter a deduction amount when reconciling.
IsExpense	Type an X in this field to indicate that the item is an employer expense (and possible accrual).
IsEmployerManaged	Type an X in this field to indicate that this deduction or expense is employer managed.
EmpeAcct	The General Ledger account to which you wish to post the employee deduction.
EmpeSub	If the General Ledger account you entered in EmpeAcct contains sub accounts, enter the appropriate sub account for the deduction item.
EmprAcct	The General Ledger account to which you wish to post the employer accrual.
EmprSub	If the General Ledger account you entered in EmprAcct contains sub accounts, enter the appropriate sub account for the item.
ExpAcct	The General Ledger account to which you wish to post the employer expense.
ExpSub	If the General Ledger account you entered in ExpAcct contains sub accounts, enter the appropriate sub account for the item.
IsActive	Verify that this column is selected (X) to indicate that the item is active.

The active entries entered here are the items that will show up on the Deductions/Expenses page of payroll reconciliation. The value of IsEmployerManaged will affect the calculations for balancing the reconciliation, as well as how values are posted to the general ledger.

Note: If you are using a Payroll Service and the service manages your expenses, you must still list them here and relate them to the proper expense account. At the time of reconciling the payroll period, the expense will be recorded and posted to the General Ledger.

P/R Service Disbursement Setup

Select the P/R Service Disbursement Setup button and make an entry for each of the disbursements you make to your payroll service. You will set up as many disbursements here as you would see listed on your bank statement related to the Pay Period.

Press Insert to make a new entry.

Only include disbursements that correspond with your payroll period(s). For example, do not include a monthly fee, if your payroll period processing is weekly. A fee like this would be entered into Succesware separate from payroll reconciliation, either through an AP Invoice or a miscellaneous check.

Overtime Tab

Overtime Setup

In order to use automatic calculation of overtime, you must define how Successware should calculate overtime.

To define payroll setup, click the Modify Payroll button.

Weekly Accumulation of Overtime: If your company pays employees overtime on a weekly basis, check the ‘Accumulate overtime on a weekly basis’ checkbox and indicate the number of regular hours an employee must be on the clock before weekly overtime hours begin to accumulate (e.g., 40 hours).

Daily Accumulation of Overtime: If your company accumulates overtime on a daily basis, check the ‘Accumulate overtime on a daily basis’ and indicate the number of regular hours an employee must be on the clock before daily overtime hours begin to accumulate (e.g., 8 hours).

The Overtime Workweek: If you are accumulating overtime on a weekly basis, you need to specify an overtime workweek end day. The overtime workweek consists of seven days and ends on the same day each week.

Overtime Pay Rate

The overtime rate or multiplier your company pays for overtime must be specified (ex 1.5). Overtime is paid as a premium.

Overtime Workweeks for Periods

Monthly and semimonthly periods do not have even segments of seven-day weeks. For this reason, the default overtime workweek is used for accumulating overtime for employees in monthly or semimonthly periods.

Weekly and biweekly period have even segments of seven days. These periods can accumulate weekly overtime based upon their seven-day segments, or you may choose to accumulate weekly overtime based on the default overtime workweek for these periods by checking the ‘Weekly periods’ and/or ‘Biweekly periods’ under the ‘Use default work week for’ heading.

NTCs and Premiums Tab

NTC entries represent times when there are no timecard entries on an employee’s timecard. When a gap exists between two entries, the system will automatically create an NTC entry to fill the gap.

The NTC’s & Premiums tab of Payroll Setup is where you will define how you wish to recognize NTC entries.

In addition, you will set up codes to identify premium pay for overtime, holidays, etc.

Lastly, you will identify whether to base premium wages on an employee’s standard hourly rate or a calculated rate for the period.

NTCs

NTC entries can be set up as paid or non-paid time. If you select to pay employees for NTC entries:

You can select whether to consider NTC as regular or non-regular pay (to accumulate toward overtime or not), and
You must select a pay item to use for the automatically generated NTC entry. Successware will use the pay item to determine where to expense the time.

Premiums

Premiums are used on timecard entries and miscellaneous wages to indicate that you wish to pay the employee a premium rate for the time or earnings segment. The system uses the premium code OT by default for regular overtime as you defined in the Overtime tab.

To Set Up Additional Premium Codes:

Select the Premiums button on the NTCs & Premiums tab of Payroll Setup.
Press Ctrl+Enter, or right-click and select Modify mode. This will open the list in edit mode. Press Insert to add a line.
Enter a unique PremiumCode and description (PremiumDesc). Then enter the multiplier you wish to use for the code in the PremiumMult field.

Premium pay rates will be calculated based upon whether you choose to base premium calculations on:

An Employee’s Standard Hourly Rate in Employee Setup.

An Employee’s Calculated Average Rate for the Given Period.

If the calculation is based upon the employee’s standard rate, premium pay rates will be calculated at the time of payroll preparation at:

Standard Hourly Rate x Multiplier = Premium Pay Rate

However, if Successware calculates that the employee’s calculated average rate is higher than his or her standard rate, you will be given a message at the time of payroll preparation that the higher rate will be used for premium pay calculation.

If the calculation is based upon the employee’s calculated average rate for the period, Successware will total all earnings for pay items that are marked IsRegOT and divide that by the number of hours worked. At the time of payroll preparation, premium pay rates will be calculated at:

Calculated Average Rate x Multiplier = Premium Pay Rate

Note: The calculated rate used for premium calculation may be lower than the employee’s standard hourly rate.

Labor Burden Tab

Labor burden is the additional employer expense of payroll such as unemployment tax, employer paid health insurance, employer 401k contributions, etc. This does not include paycheck deductions/withholdings.

For example:

You have an employee that earns $18.50 an hour.
In addition to the hourly rate you pay the employee’s health insurance, make a 401K contribution and pay payroll taxes.
Once you add these extras, the employee’s actual per hour cost to you is $23.13 per hour.
This difference of $4.63 per hour or 25% is your LABOR BURDEN.

Each time you process a payroll period; the percent of labor burden will change slightly based upon the actual gross wages earned. By “estimating” the percentage of labor burden you can post this additional expense at the time of posting payroll as opposed to waiting until you reconcile.

This estimated figure would show on daily financial statements always representing current labor liabilities. You may choose to post payroll with or without the ELB.

Note: It is very important that you try to come up with a multiplier that is close to your real expense, or you will be posting an amount either too great or too small.

If you choose to post payroll with the ELB, you may choose to:

Post the ELB into a specific ELB general ledger account, or
Post the ELB with earnings/wages to the accounts specified on the pay items recorded on timecard and miscellaneous wage entries.

The first option keeps the ELB separate from job cost. The second method will include the ELB as a part of labor job cost.

If you decide to post an ELB with your payroll, you must set up a Labor Benefits Multiplier (LBM Preset). The LBM Preset is used to estimate these expenses. The estimated labor burden will be calculated as:

ELB = (Earnings * LBM) - earnings

The Average LBM: Your Company’s Average LBM is used to monitor the LBM Preset to ensure that it provides a reasonable estimate for GL posting. The average is calculated based the history of previously posted and reconciled payroll periods. You may specify how many months of history you wish to use to calculate the average LBM.

The Warning Threshold: You may specify a Warning Threshold that Successware will use to decide when to warn you to adjust your LBM Preset. You will be warned to adjust your LBM Preset during reconciliation if:

Average LBM < (LBM Preset – Threshold)

Average LBM > (LBM Preset + Threshold)

A threshold of 1.0 would be less sensitive than a threshold of 0.01.

Import/Export Tab

The Import/Export tab will be used to define:

An Export Model if you are processing Payroll through QuickBooks Pro.
The location of the folder Successware should use when importing or exporting payroll information.
The specific reconciliation information you plan to import.

Export Method

The Export Method that you choose what export options will be available to you when you perform an export. If you are using QuickBooks Pro and plan to export your gross wage information for use in QuickBooks, you will need to decide which version of QuickBooks you will be using.

Select the drop-down list and select the version of QuickBooks Pro that you are using.

Import/Export Folder

Specify a folder for Successware to use when importing/exporting payroll files. When Successware exports payroll files, it will put them in the folder specified here. When Successware imports payroll files, it will expect to find them in the folder specified here.

To Select the Folder:

Click the 3 dots at the end of the row.
Navigate to the desired folder and select the folder.
Click OK.

Note: If you know the filename and path, you can type it into the field.

Perform External Payroll Data Integrity Check

The Perform External Payroll Data Integrity Check button only needs to be used if you are still using QuickBooks Pro 2000. If you are using the 2003 version of QuickBooks or later to process your payroll, the data integrity check if performed automatically.

The Data Integrity check is used to confirm that all information required by external payroll system is properly represented in the payroll file that you will be exporting from payroll. If the appropriate data were not present, you would be prompted with instructions. Again, at this time, use of this button is only required when using QuickBooks Pro 2000.

Period Reconciliation Import

In order for you to set up import filters, you must first create a reconciliation import file for paychecks from your external payroll system and put it in the import/export folder. Then, from Successware's payroll setup you will click the import filter button next to import type to set up the import filter.

You can import the following reconciliation information:

Paychecks
Deductions
Additional Employer Expenses
Disbursements

To configure Successware to import paycheck, deduction, additional employer expense or disbursement information for a payroll service for use in reconciliation, you will need to:

Check the appropriate checkbox(s).
Enter a file suffix to be used for that type of data.
Set up the import filter for that type of data.

Miscellaneous Tab

In some areas, multiple local payroll taxes are imposed based upon the location of the work being performed in combination with the employee’s place of residence. If the local governments in your area require this type of withholding and your payroll service or external payroll software cannot handle this, then Successware can be set up to assist with the calculation.

Local Payroll Tax Setup

To use this feature of Successware, you will need to:

Turn on the Assisted Calculation of Multiple Local Payroll Tax Withholding option on the Miscellaneous Tab to Payroll Setup.
Set up local payroll tax codes in the Payroll Tax Code reference book.
Be sure to assign one of these payroll tax codes to each city/zip combination in the Cities reference book.
Set up each employee with an Employer Payroll Tax code.

Activating Multiple Local Tax Code Processing

When you activate the Multiple Local Payroll Tax option in Successware you will be:

Able to produce Local Payroll Tax Withholding Reports.
Notified when preparing employees, if all timecard based and miscellaneous wages do not have proper payroll tax coding.
Prevented from posting the payroll period until all the payroll tax coding is complete for the period.

To Activate Multiple Local Tax Code Processing

Click the 21 button on the toolbar to open the Main Menu.
Click the Setup button in the left column.
Click the Payroll button in the right column.
Click on the Miscellaneous Tab.
Click the Edit button at the bottom of the Payroll Setup window.
Select the Assisted Calculation of Multiple Local Payroll Tax Withholding option.
Click the Save button.

Note: From the Miscellaneous tab of Payroll Setup, you can access the reference books required for this feature:

Payroll Tax Codes
Cities
Zip Codes

Setting up Local Payroll Tax Codes

Local payroll tax codes can be set up in the reference library to define the jurisdictions for which you wish to withhold taxes.

You can add your local tax codes in the Local Payroll Tax Codes table from the:

Miscellaneous tab of Payroll Setup.
The Payroll section of the Reference Library.

To Add a Local Payroll Tax Code:

Open the Local Payroll Tax Code Table.
Press Ctrl+Enter to put the table in edit mode.
Press Insert to add a new entry.

Make entries in the following fields:

Code	Description
PRTaxCode	Six-character alphanumeric code that uniquely identifies the taxing jurisdiction you are defining.
PRTaxDesc	Brief description of the taxing jurisdiction.
Withhold	Percentage of the employee’s gross wages to be withheld.
ResBal	Put an ‘X’ in this column if you want to withhold the difference between the location of service withholding and the location of residence withholding. For example: an employee performs work in a jurisdiction ‘T1’ where the percentage is 1.5%. This employee resides in a jurisdiction ‘T5’ where the percentage of withholding is 2.0%. 1.5% of the wages earned for this service will be reported as withholding for the jurisdiction ‘T1’. If the ResBal column is checked for the ‘T5’ jurisdiction, then the balance of 0.5% (2.0-1.5) will be reported as withholding for the jurisdiction ‘T1’. If the Option is not selected, tax will only be reported for withholding for the service location (T1) and nothing reported withheld for the resident jurisdiction (T5).

Press Enter to save the new code.

Note: Along with the jurisdictions that require withholding, if there are cities/zips in your area that do not require withholding you will need to set up a code that has a percentage of 0%. When using this feature, it is important that all cities/zips are set up with a tax code, even if they do not require withholding.

Identifying Local Payroll Tax Codes for Cities/Zip codes

Once you have created Local Payroll Tax Codes, you must associate them with cities and zip codes in either the Cities reference book or the Zip Code reference book. When an employee does work for a job in one of the cities/zips, the withholding amount will be reported for the corresponding Local Payroll Tax Code.

To Add Local Payroll Tax Codes to Cities/Zip Codes:

Open the Cities or Zip Codes reference table.
Press Ctrl+Enter to put the table in edit mode.
Press Insert to add a new entry.
Add new entries in the table being sure to choose an entry in the PRTaxCode field for each entry made.
Press Enter to save the entry.

Note: If Cities/Zip Codes are already listed you can highlight each and press Enter to place the code in edit mode. Once in edit mode choose a PRTaxCode and press Enter to save.

Employee Setup

You must assign an Employer Payroll Tax code to each employee. This code will be the code assigned to non-job-related timecard and miscellaneous wages (i.e., shop time, available-on-the-clock, lunch etc…). The Code you choose should identify the jurisdiction in which you want to withhold tax for the employee for non-job-related wages. This is usually your company location.

Additionally, the employee must have valid address information recorded on the Address/Phone Tab. The City/Zip information on the Address/Phone tab will be used to determine the jurisdiction of residence of the employee.

Preparing Payroll Periods with Local Taxes

When payroll periods are prepared, the period’s timecard entries, and miscellaneous wages are associated with their appropriate payroll tax code as set up at the time of preparation. This information is then used to generate reports that display taxes owed to particular municipalities.

The local payroll tax code will be assigned to entries as follows:

Job related entries will use the tax code associated with the city/zip of the service location.
Non-job-related entries will use the tax code setup on the employee’s setup: “Employer Tax Code”.
Residence Balance withholding will be based on the tax code associated with the city/zip of the employee’s residence in employee setup field: Address.

Withholding Local Taxes

- The withholding of all taxes, federal, state or local must take place within your external payroll service, or software (e.g., QuickBooks).
- Successware can generate a report that will list for you the totals you need to withhold for the multiple local taxing jurisdictions.
- These figures can then be supplied to your payroll service, or manually entered as a deduction/withholding in your payroll software.

Reporting Local Tax Withholding

To obtain a report that identifies each employee’s total local tax withholding for a payroll period:

From the Payroll Manager, select the period in question.
Select the report option Wage Source Report.
Select the report option Local Tax Withholding Analysis in the Analysis Type area of the report.

This option will analyze timecard entries and miscellaneous wages and summarize the total local tax withheld by:
- Employee.
Or
- By individual tax code.
In the Detail Options area of the report, select the required level of detail:
No Detail- Individual timecard entries and miscellaneous wages will not be listed.
Time Breakdown Detail- The breakdown of regular, overtime, premium, non-regular and non-paid time for each timecard entry and miscellaneous wage will be listed.
Job Location Detail- Job location name and address information will be listed for each timecard entry and miscellaneous wage will be listed.
Withholding Detail- The local tax code, percent of withholding, amount withheld, balance percentage to be withheld for the residential taxing jurisdiction, and the amount withheld for the residential taxing jurisdiction.
Choose the Payroll Period Range for which you want to run the report.
Choose whether you want to run the report for all employees or for a selected employee.
Select either the Print or Preview buttons at the bottom of the window.

The resulting report will list for each employee the total withholding for all local taxing jurisdictions for the associated payroll period. These figures can be supplied to your payroll service, or manually entered as a deduction/withholding in your payroll software.

Reconciling the Local Tax Withheld

No special steps are required when reconciling payroll periods to reconcile the local tax liabilities. This liability will reconcile into one single expense/addition in the same fashion as other tax withholding liabilities.

The Wage Source Report can be used to determine the breakdown of that liability to the individual taxing jurisdictions.

Payroll Setup - Employee Setup

Before Payroll can be activated and used, in addition to normal employee setup (Employee Code, name, scheduling information, etc.) employee payroll setup must be completed. Required employee payroll setup is completed in the Employee Setup form and includes:

Pay Type
Pay Period
Hourly Rate or Annual Salary
Average Check
Automatic Overtime

The specific setup available for an employee depends upon the Pay Type that is chosen for the employee.

To access the Employee Setup form select the 21 Icon to access the Main Menu and click Setup and then Employee Manager.

To Add an Employee

Press Insert, or click New. The system automatically generates the Employee Code, but you may overwrite it. The Employee Code will appear in the Call Center. For employees that will appear in the Call Center, make sure to enter the name, initials, or number that you wish to use as the Employee Code. Another field is available for employee number.

Note: Once an employee is saved, the Employee Code can no longer be changed!

Enter the employee’s name (first and last) and select the Employee Type. The system will mark the appropriate check boxes; Sales person, Technician, and Maintain Assignments based on the type selected. Make sure that Maintain Assignments is marked for all employees that you wish to schedule in the Call Center. If this is checked, timecard entries will automatically create assignments.
Automatic Overtime- If ‘automatic overtime’ is checked, overtime automatically calculated based on overtime setup will be included in the employee’s total overtime for a period. If ‘automatic overtime’ is not checked, only manual overtime will be included in the employee’s total overtime. In either case, during automatic calculation, both weekly and daily overtime will be calculated and available for reference. (This ‘automatic overtime’ setting can be overridden for an individual overtime period in the employee’s timecard.)
Enter the employee’s Job Title in the appropriate field.
Select Active to indicate that this employee is presently employed and actively working.
Move through each of the tabs (Scheduling, Address/Phone, etc.), and enter the appropriate information.
Click Save.

The Employee Setup Form

The Employee Setup form contains a number of tabs of information pertaining to the specific employee.

The Scheduling Tab

The Scheduling Tab will make different fields available to you depending upon whether the selected employee is marked as a Technician or Sales person or not.

The following fields are only available for Technicians or Salespersons. When assigning jobs, the system will refer to these fields to indicate which technicians are qualified to perform the job and will display the wrench, screwdriver and wand icons where appropriate.

Field	Description
Work Schedule	Use the mouse or spacebar to check the days of the week the employee normally works. Then enter the employee’s normal start and stop times. The Work Schedule must be set up for ALL employees if you are using payroll (Even Salaried employees). Successware will post salaried employee’s wages to the G/L based upon their work schedule.
Note	Use this field to enter any comments or notes about the employee or his/her schedule. This information is displayed as a pop-up hint when placing your cursor over the employee’s title panel in the Call Center.
Default Dept	Enter the department in which the employee normally works. This department will be used for timecard entries that have no department assigned (i.e. NTCs or Non Job related entries such as lunch or meeting time.).
Vehicle ID	If the employee has been assigned a company vehicle, enter the vehicle’s ID here.
Qualifications and Skills	This button will allow you access to the Qualifications and Skills window, which allows you to identify the Job Classes, Job Types and Skills performed by a technician. These qualifications will be referenced when a call is assigned to the tech. If the tech does not have the appropriate qualifications and skills to perform the call, a warning will be displayed. Additionally, icons will appear with the employee in the Call Center to identify qualifications.

Wage Information Tab

On the Wage Information tab you will define information related to Payroll for the selected employee.

Field	Description
Pay Type	Select whether the employee is Hourly, Salary or is paid by Piece rate. ONLY set up employees as hourly if you want their earnings based on timecard entries. If pay is based upon billed hours your will use Piece Rate and enter their hours through the Miscellaneous Wage Manager.
Pay Period	Select how often the employee is paid. Only the pay periods you have defined in payroll setup will be available.
# Exemptions	Enter the number of exemptions that the employee is claiming. This field is for your information only and not used by the payroll module.
Hourly Rate	For hourly employees, enter the employee’s hourly pay rate. Then enter the number of hours the employee normally works in the pay period in the Avg Hrs/Period field. The system will calculate the Annual Salary and Avg Check.
Annual Salary	For salaried employees, enter the employee’s annual salary. Then enter the number of hours the employee normally works in the pay period in the Avg Hrs/Period field. The system will calculate the Hourly Rate and Avg Check.
Avg Hrs/Period	Enter the number of hours the employee normally works in the pay period.
Avg Check	For piece rate employees, enter the gross amount of the employee’s normal check. For hourly and salaried employees, this field will calculate automatically.
Pay Rates	Click on the Pay Rates button to optionally set up varying rates for different types of work, or for pay items. This is ONLY for hourly employees.
Bill Rate	The amount you bill for this employee. If Payroll is not active, the system will use this as the bill rate for cost plus invoicing.
Bill Cost	The cost per hour for this employee. If Payroll is not active, the system will use this as the hourly labor cost when importing timecard entries on an invoice.
Next Review, Last Review and Last Raise	Enter the appropriate dates.
Last Hourly Rate or Last Salary	The employee’s pay rate as of the last change.
Hire Hourly Rate or Last Salary	The employee’s starting pay rate.

Payroll Manager

The Payroll Manager is where you will prepare, review, post and reconcile payroll periods. In addition, the Payroll Manager gives you access to previous payroll periods for review purposes. You can also generate Payroll based reports from the Payroll Manager.

Opening the Payroll Manager

Click the 21 button on the toolbar to open the Main Menu.
Click the Payroll button in the left column.
Click the Payroll Manager button.

The Payroll Manager has three modes:

•Payroll Periods Mode- This is where you will create and maintain payroll periods. This mode also lists your payroll periods and their current status.
The icon that appears in the first column of the row identifies the current status of a payroll period. The following table identifies the icons displayed in the Payroll Periods Mode.

	Locked- all of the employees within the period are locked.
	Modified- payroll information for one or more employees in the period has been modified.
	Verified- all of the employees within the period are verified.
	Posted- the period has been posted go G/L.
	Reconciled- the period has been reconciled.
	Adjusting- the period has been adjusted, but not re-posted.

•Period Review Mode- This is where you will review the employees and wages associated with a specific pay period.

•Employee Review Mode- This is only accessible from Period Review Mode and is where you will review individual employee timecard entries and wages for the selected pay period.

Control Menu Options in the Payroll Manager

You can view all open periods or all periods for a given year. To access the Payroll Period view menu, click the period grid header, press Alt+V, or right click on the period grid and select ‘view’.

Menu Option	Description
Period	Allows you access to a submenu of options related to the selected payroll period including the ability to prepare and post the period as well as reset or delete the period if necessary. The Period option also allows you to review General Ledger activity related to the posting and reconciliation of the selected period.
View	Allows you access to a submenu of options that will allow you to control the display of periods in the Payroll Manager grid.
Create Periods	Is used to create new payroll periods.
Payroll Setup	Allows access to the Payroll Setup screen.
Obtain Payroll Lock	When selected, the ability to edit payroll information is limited to the user who activated the lock. Other users who try to perform actions in the Payroll Manager will receive a message indicating that a Payroll Lock cannot be placed. To remove the lock, the user who placed the lock, must right click and choose release payroll lock.
Period Review	Allows you to prepare and review the selected payroll period.
Close	Offers the option to close the Payroll Manager.

Other things to Consider

Estimated Labor Burden

What is Estimated Labor Burden and why would I want to post it with payroll?

Labor Burden is the additional expense you incur simply because you have employees. It includes employee benefits, taxes (the employer portion), insurance, etc.

You can use historical payroll reports to calculate what percentage of your overall payroll is the additional expense. The following sample payroll report is an example:

In this example the employer has incurred 8,858.60 in gross pay. That is what he is paying his employees for salary and commissions they have earned. But, he has also incurred an expense of 1,052.52 for taxes and other contributions. So his total payroll expense is 9,911.12 – about 12% more than his gross.

Successware can include the additional 12% as an Estimated Labor Burden when posting your initial payroll expense. When you reconcile payroll with your actual numbers, the estimated labor burden will reverse and actual numbers will post.

There are a couple of reasons why you may wish to have this estimated burden post:

Expenses will be more accurate on financial reports prior to reconciling payroll.
Using Estimated Labor Burden will departmentalize the expense.

When setting up Payroll, you will have 3 options for posting estimated labor burden:

Not to post an estimated labor burden
To post an estimated labor burden to a default labor burden expense account
To post an estimated labor burden as indicated by the (associated) timecard entry’s pay item

Sample Accounting Flow for Estimated Labor Burden Options

In this example the total earnings for both monthly, salaried employees is $3,333.36 in salary and $5,525.24 in commissions. The initial payroll posting will post the actual earnings to the appropriate expense account as defined on the pay item’s expense type. This will be offset with Accrued Payroll. The entries will use the timecard date for timecard entries, or the ‘released’ date for miscellaneous wage entries, as the post date.

When Payroll is reconciled the amount credited to Accrued Payroll will be debited. Balancing entries will be made in the accounts defined for listed deductions and additional expenses as determined in Payroll setup.

All entries posted during reconciliation use the Check Date as the posting date.

Method 1 – Posting payroll without an Estimated Labor Burden

Original Posting

Account/department	Debit	Credit
2101 – Accrued Payroll		8,858.60
4650-21 – Cost of Sale Commissions	5,525.24
6000-21 – Salesperson Wages	3,333.36
	8,858.60	8,858.60

Reconciliation Posting

Account/department	Debit	Credit
2101 – Accrued Payroll	8,858.60
1004 – Checking Payroll		6,442.92
2201 – FICA & Medicare Withheld		677.68
2202 – Federal Withholding		1,546.00
2205 – FICA & Medicare Employer		677.68
2206 – State Unemployment		77.91
2207 – Federal Unemployment		31.17
2311 – 401(k) Contribution		265.76
2312 – 401(k) Withheld		125.00
6400-00 – FICA & Medicare Expense	677.68
6420-00 – Payroll Taxes Other	109.08
6520-00 – Group Medical Reimbursement		67.00
6540-00 – 401(k) Expense	265.76
	9,911.12	9,911.12

Method 2 – Post an Estimated Labor Burden to the default Estimated Labor Burden account as defined in General Ledger setup. (In our example-6510.)

Original Posting

Account/department	Debit	Credit
2101 – Accrued Payroll		10,098.87
4650-21 – Cost of Sale Commissions	5,525.24
6000-21 – Salesperson Wages	3,333.36
6510-21 – Estimated Labor Burden	1,240.27
	10,098.87	10,098.87

Reconciliation Posting

Account/department	Debit	Credit
2101 – Accrued Payroll	10,098.80
1004 – Checking Payroll		6,442.92
2201 – FICA & Medicare Withheld		677.68
2202 – Federal Withholding		1,546.00
2205 – FICA & Medicare Employer		677.68
2206 – State Unemployment		77.91
2207 – Federal Unemployment		31.17
2311 – 401(k) Contribution		265.76
2312 – 401(k) Withheld		125.00
6400-00 – FICA & Medicare Expense	677.68
6420-00 – Payroll Taxes Other	109.08
6510-00 – Estimated Labor Burden		1,240.20
6520-00 – Group Medical Reimbursement		67.00
6540-00 – 401(k) Expense	265.76
	11,151.32	11,151.32

The original posting applied the estimated labor burden to the default estimated labor burden account (6510) and the same department to which the earnings were posted.

The system credits the estimated labor burden from the default estimated labor burden account (6510) and department 00 and posts the actual payroll expenses when it is reconciled.

Method 3 – With an Estimated Labor Burden as indicated by the timecard Pay Items (labor burden is added directly to each payroll item, including the item’s department number.)

Original Posting

Account/department	Debit	Credit
2101 – Accrued Payroll		10,098.87
4650-21 – Cost of Sale Commissions	6,298.77
6000-21 – Salesperson Wages	3,800.10
	10,098.87	10,098.87

Reconciliation Posting

Account/department	Debit	Credit
2101 – Accrued Payroll	10,098.80
1004 – Checking Payroll		6,442.92
2201 – FICA & Medicare Withheld		677.68
2202 – Federal Withholding		1,546.00
2205 – FICA & Medicare Employer		677.68
2206 – State Unemployment		77.91
2207 – Federal Unemployment		31.17
2311 – 401(k) Contribution		265.76
2312 – 401(k) Withheld		125.00
4610-00 – Burden Applied		1,240.20
6400-00 – FICA & Medicare Expense	677.68
6420-00 – Payroll Taxes Other	109.08
6520-00 – Group Medical Reimbursement		67.00
6540-00– 401(k) Expense	265.76
	11,151.32	11,151.32

The original posting applied the estimated labor burden to the same expense and department to which the earning was posted.

Reconciling left that estimated amount in the expense and department but reversed the original estimated amount using a burden-applied account. The net result is that the labor burden (albeit an estimate) will appear on financials with the labor. Since there is an offsetting entry to 4610 the bottom line remains the same.

Overtime

You can select to calculate overtime automatically or enter it manually.

Automatic Overtime can be configured to calculate daily or weekly for hourly employees. It is applied to timecard entries only.

Manual Overtime can be entered for any employee. It can be entered as a premium code on timecard entries or miscellaneous wage entries.

Whether you select to use Automatic or Manual overtime, the system will refer to the ‘RegOT’ column on pay items to determine which pay items should factor into number of hours and/or pay rate to use for overtime calculations.

Overtime is calculated based on several options that you will configure when setting up Payroll.

The Automatic Overtime option in the Employee form – selected on employees for whom you wish to automatically calculate overtime.
The Pay Items that have been marked as “RegOT”
Overtime Setup – can choose to accumulate daily or weekly or both.
Payroll Premium Setup – can choose to calculate the base and premium based on the employee’s standard hourly rate, “normal” rate of the pay item, or a calculated average rate for each payroll period.

What is “Regular” pay?

Regular pay and hours represent the type of earnings an employee will typically earn throughout the year. Those earnings should be taken into consideration when calculating overtime.

Pay Items such as Vacation or Holiday are not usually considered regular pay. For instance, suppose an employee has 42 hours on his timecard and you pay overtime on hours over 40. However, 8 of those hours were vacation hours so he really only worked 34 hours. Would you pay him 2 hours of overtime? If not, the vacation pay item should not be marked RegOT. Then the system will calculate that he has 34 ‘regular’ hours for the week and automatic overtime will not add 2 hours overtime.

You will determine if earnings such as Commissions or Bonuses should factor into the rate for premium calculation. Since commissions and bonuses are not hourly pay items they will not affect the number of hours the employee has for the week. However, when the system calculates the average rate for the payroll period it may consider those earnings as part of the employee’s regular earnings. The system will divide regular earnings by regular hours to determine the pay period’s average pay rate.

As mentioned earlier, you will indicate which pay items should be considered regular pay and factored into overtime/premium calculations by typing an X in the RegOT column when adding Pay Items.

Number of Hours

Overtime is always paid as hourly pay within Successware.

When using Automatic Overtime for your employees, the system will automatically calculate how many hours each employee has earned for the pay period based on the number of hours on his or her timecard that were entered using a pay item that is marked RegOT and how you configured Overtime Setup when setting up payroll.

You can select to calculate overtime on a weekly basis or a daily basis. You will also enter the number of hours after which you consider overtime (i.e. 40 hours for the week or 8 hours for a day.)

You can also select both. The system would calculate daily overtime first, then weekly overtime.

Example:

The sample employee has 44.25 regular hours for the weekly payroll period. It is broken down by day as follows:

Day of Week	# of hours	OT hrs/day
Monday	11	3
Tuesday	9.25	1.25
Wednesday	8.5	.5
Thursday	9.5	1.5
Friday	6	0
Total Hrs.	44.25	6.25

If you calculated the employee’s overtime on a weekly basis after 40 hours, he would receive 4.25 hours in overtime pay.

If you calculated the employee’s overtime on a daily basis after 8 hours, he would receive 6.25 hours in overtime pay.

If you selected to calculate the employee’s overtime on both, he would receive 6.25 hours in overtime pay because the system is calculating daily first, then weekly.

So what advantage is there to using both? Why not just use daily?

The advantage to using both daily and weekly overtime would be when the employee does not have over 8 hours on any day, but worked over 40 hours for the week. For instance, the employee worked 8 hours every day Monday through Friday, then worked 4.5 hours on Saturday. If you were only using the daily calculation he would not receive any overtime pay even though he worked 44.5 hours for the week.

Premium Rate

Once you, or the system, have determined the number of hours that should be considered overtime, the system will calculate the premium rate of pay based on the following formula:

Premium Rate = Base Rate + Premium Addition

You have 3 options to select the Base Rate. By:

Normal rate for work performed (Recommended)
Employee’s calculated average (regular) rate for the given period
Standard hourly rating from Employee Setup (if higher than regular rate)

You have 2 options to select the Premium Addition. By:

Employee’s calculated average (regular) rate for the given period (Recommended)
Standard hourly rating from Employee Setup (if higher than regular rate)

Therefore, you have 5 different combinations you can select to calculate the correct premium calculation for your employees:

Normal base + calculated average premium addition
Normal base + standard hourly rate for premium addition
Calculated average base + calculated average premium addition
Calculated average base + standard hourly rate for premium addition
Standard hourly rate base + standard hourly rate for premium addition

The system calculates the “average” hourly rate based on total regular earnings. It does so to ensure employees with no, or varying, hourly rates are paid a fair wage. The average rate is calculated by dividing the regular earnings by regular hours for the payroll period.

You may select to use “Employee’s standard hourly rating in employee setup” for the base and/or the premium addition. However, if the system calculates an average rate that is higher than the employee’s standard hourly rate, it will use the average anyway. If that situation occurs, the system will display a message indicating that there are employees in the pay period whose calculated rate is higher than the employee’s standard rate. It will allow you to display a list of the affected employees.

You must understand how rates are calculated for the different types of employees in order to determine how you wish to set up employees and how you wish to enter their overtime, if any.

Some examples of rate calculation follow:

Rate calculation and overtime for Salaried Employees

Example 1 – Salaried employee with salary expensed using timecard entries

The sample employee is set up to be paid a salary of $1,000.00 each week. How that salary is split by date, GL account, and departmentally will be determined by his timecard entries.

When entering payroll information for Pete, we indicated that his annual salary would be $52,000.00, which is $1,000.00 per week. We also indicated that his ‘average’ hours per pay period would be 40 so the system calculated an hourly rate of $25.00.

For our sample payroll period, Pete had 46.5 hours on his timecard; one hour for pay item TECH and department 10, 7.5 hours for pay item TECH and department 20 and 38 hours of SHOP time.

Notice that his earnings are $1,000.01 and were calculated with a rate of $21.5054. Here’s why:

The system will calculate his rate each pay period by dividing $1,000.00 by the number of regular hours on the employee’s timecard. In this case the employee has 46.5 hours on his timecard so the calculation is 1,000.00/46.5 = 21.50537634 and is rounded to 21.5054. That is the calculated average (regular) rate for the employee this pay period.

If you add the total earnings from the wage summary in the example above you will notice that the 3 calculated earnings do total $1,000.01 because of rounding.

If you apply an overtime premium to a one-hour timecard entry the system will calculate the overtime rate as described below.

Payroll Setup Base/Premium	Base Rate	Premium Addition	OT Rate
Normal/Calculated	21.5054	10.7527 (1/2 of 21.5054)	32.2581
Normal/Standard	21.5054	12.50	34.0054
Calculated/Calculated	21.5054	10.7527	32.2581
Calculated/Standard	21.5054	12.50	34.0054
Standard/Standard	25.00	12.50	37.50

Example 2 – Salaried employee with salary expensed using salary splits

The sample employee is set up to be paid a salary of $1,000.00 each week. How that salary is split by GL account, and departmentally will be determined by percentage splits defined in employee setup.

How the employee’s salary earnings will post by date is determined by the employee’s schedule and the number of hours in the pay period. For instance, the sample employee’s schedule is Monday through Saturday and there are 40 hours in the employee’s payroll period so the system will post 6.75 hours each for those 6 days.

Any additional hours entered in Miscellaneous Wages will post on the item’s date to the general ledger account indicated on the pay item. If the Pay Item is marked IsRegOT, the hours will be added to the standard hours from the employee’s setup when calculating the average rate for the period.

You will notice that, when using Salary Splits, the system maintains a rate that is approximately 25.00 per hour. You will see a variance plus or minus by a penny or two for rounding.

However, if you have other regular earnings, such as Commissions, the calculated rate will be affected. For instance, if this employee also has commission earnings of $250.00, his total regular earnings for the payroll period will be $1,250.00. The system will divide total regular earnings by the number of hours in the payroll period to determine the hourly rate. In this case it will be:

$1,250.00/40 = 31.25

The system will use $31.25 as the calculated average for overtime purposes.

If you add an hour of overtime to this employee for this pay period the system will calculate the overtime rate as described below. Since we are adding an hour at $25.00 (the employee’s standard rate) the calculated average will change to accommodate the new earnings. The new average rate will be 1275.00/41 = 31.0976.

Since the calculated rate is higher than the standard rate, the system will use the calculated rate when standard is the setup option.

Calculations based on the different setup options for sample employee:

Payroll Setup Base/Premium	Base Rate	Premium Addition	OT Rate
Normal/Calculated	25.00	15.5488 (1/2 of 31.0976)	40.5488
Normal/Standard	25.00	15.5488	40.5488
Calculated/Calculated	31.0976	15.5488	46.6476
Calculated/Standard	31.0976	15.5488	46.6476
Standard/Standard	31.0976	15.5488	46.6476

Rate calculation and overtime for Piece Rate Employees

Piece rate wages are entered in the Piece Rate Assistant or Miscellaneous Wages for Piece rate employees. Piece rate earnings are not associated with number of hours worked. They can be entered as a Base amount, a percentage of Total Sale, or a combination of the two.

The Wage Summary will show the earnings as they are split between department and/or Pay Item.

The system will calculate the piece rate employee’s average rate based on the number of regular hours on the timecard or entered as hourly miscellaneous wages. It will divide total regular earnings by the regular hours per period. Therefore, his average rate may vary from week to week.

The sample piece rate employee was set up with an average check of $1,000.00 and average hours per pay period of 40.

In our sample pay period, the employee has regular earnings of $940.77. He has 41 regular hours from his timecard entries and miscellaneous wages. His calculated average hourly rate for this pay period is $22.9456 ($940.77/41 = 22.9456).

Calculations based on the different setup options for sample employee:

Payroll Setup Base/Premium	Base Rate	Premium Addition	OT Rate
Normal/Calculated	25.00	11.4728 (1/2 of 22.9456)	36.4728
Normal/Standard	25.00	12.50	37.50
Calculated/Calculated	22.9456	11.4728	34.4184
Calculated/Standard	22.9456	12.50	35.4456
Standard/Standard	25.00	12.50	37.50

Rate calculation and overtime for Hourly Employees

The rate calculation for hourly employees is pretty simple – regular earnings divided by regular hours. However, there can be some instances that complicate it somewhat.

If the employee has other regular earnings, or has non-regular hours, his calculated average hourly rate will be affected.

Example 1:

This hourly employee is set up for automatic overtime. He makes $20.00 per hour and has 47.75 hours on his timecard. However, 1.5 hours is non-paid and he took 4 hours of vacation time, which are not regular hours. Therefore, his regular hours add up to 42.25.

To determine the calculated average hourly rate the system multiplies Total regular hours by the employee’s hourly rate to get regular earnings. It then divides regular earnings by the number of regular hours to get the hourly rate. Or,

42.25 x 20.00 = 845.00/42.25=20.00

Since the employee has no other regular earnings, it is simply his normal hourly rate. Since his Normal, Standard and Calculated rates are the same, his overtime rate will be 30.00 no matter what options are selected in Payroll Setup.

Example 2:

The same employee has other regular earnings that are not hourly. His average hourly rate will change. The system will use the same formula to calculate his average hourly rate but the regular earnings will have increased. For example, assume the employee also earned $250.00 in regular commissions. The system will calculate:

(42.25 x 20.00) + 250.00 = 1095.00/42.25=25.92

Therefore, the system will use the rate of 25.92 as the Calculated average rate. The employee’s Normal and Standard rates will remain 20.00.

Note: If the system is set up to use the standard rate and the calculated average rate is higher, the calculated average rate will be used.

Example 3:

The same employee has 47.25 hours on his timecard. Of the 47.25 hours, only 42.25 is regular time. In addition, he has 8 hours of overtime that was entered through Miscellaneous Wages. When the employee works in the shop he is paid a different hourly rate than when he is on service calls. He will be paid 18.00 per hour for shop time.

His earnings will calculate based on 15.5 hours of Shop time and 34.75 hours of regular hourly pay.

The system will calculate his average hourly rate as follows:

(15.5 x 18.00) + (34.75 x 20.00) = 974.00/50.25 = 19.3831

Calculations based on the different setup options for sample employee:

Payroll Setup Base/Premium	Base Rate	Premium Addition	OT Rate
Normal/Calculated - Shop	18.00	9.6916 (1/2 of 19.3831)	27.6916
Normal/Calculated - Tech	20.00	9.6916	29.6916
Normal/Standard - Shop	18.00	10.00	28.00
Normal/Standard – Tech	20.00	10.00	30.00
Calculated/Calculated	19.3831	9.6916	29.0747
Calculated/Standard	19.3831	10.00	29.3831
Standard/Standard	20.00	10.00	30.00

Overtime options

There are three methods you can use to pay overtime to your employees. Refer to the chart to determine which method is recommended for your employees.

Method No.	Description	Recommended for Employees with Pay Type
Method No.	Description	Hourly	Piece Rate	Salary
1	Automatic overtime	Yes	No	No
2	Manually assign premium codes to timecard or hourly miscellaneous wage entries	Yes	Maybe	Maybe
3	Manually enter lump sum earnings for overtime in miscellaneous wages	No	Maybe	Yes

Method 1 – Automatic Overtime

Automatic overtime can only be used for hourly employees whose hours are entered through the Timecard Manager. This includes entries that are automatically created as Call Progress is completed, and manual timecard entries.

The system will calculate overtime weekly and daily for all regular hours worked based on your overtime setup (in Payroll Setup). It can be combined with manual overtime and can be overridden for a payroll period.

You will select the “Automatic Overtime” checkbox in Employee Setup for all employees that should calculate automatic overtime.

Example 1:

This is an example of automatic overtime calculation with no manually entered overtime. The employee is an hourly employee who has 46.25 paid hours in the payroll period. The system is set up to calculate overtime after 40 hours in a week. Four of the hours were for vacation pay and are not considered regular hours.

The employee only has 42.25 regular hours worked so that is what the system will use to calculate that he has 2.25 hours of overtime. Notice that the system used the average hourly rate to determine the premium rate.

Example 2:

The same employee has the same 46.25 hours on his timecard, 4 of which are non-regular. However, he worked 3 hours late on Monday so the employer wishes to apply that as overtime to the specific job he was on that day. A premium code of OT was manually assigned to 3 hours on the employee’s timecard for that day.

The system will pay him the 3 hours as overtime since it was manually entered, but does not automatically calculate any overtime hours because the 3 manual hours exceeds the 2.25 hours the system would automatically calculate.

If the manual overtime is less than what the system would calculate for overtime, the system will calculate the difference automatically when you calculate overtime. For instance, in this case the employee should be paid 2.25 hours in overtime. If 1 hour was manually assigned a premium code, the system will automatically calculate the remaining 1.25 hours.

Method 2 – Manually assign premium codes

You can manually assign a premium code to timecard or hourly miscellaneous wage entries in order to calculate overtime pay for employees. The system will look at the premium code setup to determine what it should use for a multiplier.

When assigning a premium to timecard entries, you can determine how many of the hours in the time segment should be paid at the premium rate.

Manual premium assignments to timecard entries should be used for salaried employees whose salary is posted based on timecard entries, or hourly employees.

When assigning a premium to miscellaneous wage entries you will enter separate line items for the regular vs. premium rate hours. You will use this method to enter overtime for hourly employees whose time is not entered through the timecard manager.

Do not change the RegRate when manually entering overtime in miscellaneous wages. The system will look at the premium code to determine how to calculate the overtime earnings. For instance, if the premium code OT has a multiplier of 1.5, the system will apply .5 of the premium addition to the base amount for the overtime earnings. Premium code DT has a multiplier of 2 so the system will apply the full premium addition to the base amount.

Method 3 – Manually enter lump sum overtime earnings

If you have an occasion to pay a salaried or piece rate employee overtime, you must manually calculate the amount you owe the employee for his or her overtime pay and enter the amount in miscellaneous wages.

Be sure to use a Pay Item that will post to the correct GL account. You will enter the amount in the Base column only.

Deferred Wages and Overtime Calculations

When entering Miscellaneous Wages, the release date and earned date allow you to control the period whose premium rate is affected by the deferred wage separately from the period in which the wage is paid to the employee. For instance, you can hold all commissions and release them in the last period of the month without having the commissions affect the regular rate for the last period of the month.

A deferred wage will affect premium rate calculations for the period that includes the earned date.

A deferred wage will be paid to the employee in the period that includes the release date. If those wages are earned in periods prior to the period in which they are paid (released), Successware will recalculate the premium rates for the previous periods and make a special miscellaneous wage entry for additional premiums that must be paid (if any).

This additional premium is based on the difference between the original premium rate of the prior period and the new premium rate as affected by the released wages.

For example:

If an employee earns a commission of $200 on 03/24/04 for the weekly period ending 03/27/04, and the commission is not released, this commission is not included in this period’s wage summary.
This commission does not affect the regular rate or the premium rate calculation for the weekly period ending 03/27/04.
The 03/27/04 period includes 6.25 hours of overtime. The calculated average (regular) rate for the period ending 03/27/04 (not including the $200 commission) is calculated to be $19.3837/hr and is the “premium base”. The regular rate (and premium base) is calculated by adding all earnings that are considered “regular wages” and dividing that total by “regular hours”. In our example, $974.00/62.25 = 19.3831.

Examples display the heading of the Wage Source report for the employee and the section of the Payroll Period Summary in detail for the employee.

The sample payroll company is set up to use the Normal rate for the base portion and the Calculated average rage for the premium addition. Notice that the system calculated the overtime rate based on the base of $18.00 for Shop time and $20.00 for Tech earnings. The same premium addition of $9.6916 was added to both base wages (19.3831/2 = 9.6916).

The wage is then released on 04/01/04 to be included in the period ending 04/03/04. The commission is included in this periods wage summary.

The commission does not affect the regular rate or the premium rate calculation for the weekly period ending 04/03/04. However the regular rate for the period ending 03/27/04 is recalculated to be $23.3632/hr, now that the $200 commission earned during that period has been released.

The regular rate and premium base for the current weekly period ending 04/03/04 is calculated using the same formula – regular earnings divided by regular hours, or, 856.67/42.83 = 20.0001. It does not include the $200.00 commission to determine the premium rate even though the pay item is marked IsRegOT.

Because it is a deferred wage, the commission is included in the Premium excess. The premium excess includes Non-regular earnings, deferred earnings, and premium earnings. Premium earnings only include the premium addition portion of premium pay. For instance, of the 27.6916 premium earning for Shop overtime, the 18.00 base is not included. Only the 9.6916 is reported as premium earnings.

The system will include special miscellaneous wage entries in the current period to make up for any premiums that were missed in the pay period ending 03/27/04 as a result of the deferred earnings. Notice there are three overtime entries in the sample period summary at a rate of 1.9900. Those are entries to pay the employee the missed premium.

Run the Deferred Wages report for the detail.

Look at the Period Summary for the first payroll period ending 03/27/04. Notice that the employee had 1.75 hours of SHOP-OT, department 20, 3 hours of TECH-OT department 21, and 1.5 hours of TECH-OT department 22.

The Deferred Wages report identifies the overtime entries in payroll period in which the commission was earned and calculates what the premium rate would have been if the commission had been released in the same payroll period. In our example the adjusted Regular Rate is 23.3632. Then it calculates the overtime rate based on the new regular rate.

The system will only pay the employee the premium pay that he would have made, not the adjusted regular rate. It will calculate the difference in the premium pay as follows:

Original Overtime rate – Original Premium Base rate = Original Premium rate

27.6916 – 18.00 = 9.6916 or 29.6916 – 20.00 = 9.6916

Adjusted Overtime rate – Original Premium Base rate = Adjusted Premium rate

29.6816 – 18.00 = 11.6816 or 31.6816 – 20.00 = 11.6816

Adjusted Premium rate – Original Premium rate = Rate

11.6816 – 9.6916 = 1.99

The additional premium wages are created for each related entry from the prior period. This allows Successware to relate the additional premium to the appropriate pay item and job, so that the items are properly expensed. Notice that there are entries for 1.75 hours of SHOP-OT, department 20, 3 hours of TECH-OT department 21, and 1.5 hours of TECH-OT department 22 in the current payroll period (ending 04/03/04) at a rate of 1.99.

Timecard Entries

Timecard entries can be created automatically through the entry of dispatch/onsite/completed times in the Call Progress window, or they can be created manually through the employee’s timecard.

Pay Item Entry Automation

When making timecard entries either from Call Progress or manually on the timecard, the pay item used for the entry is automated upon selection of the timecard status. The Pay Item will contain an expense type, which will direct the expense associated with the timecard entry to the appropriate general ledger account.

The following hierarchy is used to determine the Timecard Entry’s Pay Item:

If the timecard status chosen has been set up with a specific Pay Item, that Pay Item will be used.
For Job related timecard entries (Onsite and Dispatched), if no Pay Item is associated with the status, the pay item associated with the job’s Job/Call Type will be used.
If no Pay Item is associated with the timecard status or the associated Job/Call Type, then the Default Pay Item will be used.

Manual Timecard Entries

Manual timecard entries are created directly in the employee’s timecard. Manual timecard entries can be job related or non-job related. Manual Timecard entries in addition to those that are job-related could include meeting time, shop time, vacation or personal time and lunch entries.

Accessing the Timecard

Timecard entries are added in the Timecard Manager. The Timecard Manager can be accessed from the:

Main Menu- Access the Main Menu and click Payroll and then Timecard Manager.
Call Center- Highlight the job for which you wish to make timecard entries. Right-click and select Employee timecard.
Employee Review view of the Payroll Manager- Right-click and select Timecard or click the Timecard button.

Recording Timecard Entries

Open the Timecard Manager.
Use the drop-down menu to select the employee.
Use the date navigation buttons to choose the date of the timecard entry.
Click Modify.
Press Insert or right-click and select Add new entry.
Select the appropriate timecard status.
Enter the In and Out times.
If necessary, change the IsPaid status of the Timecard Entry. If you change a non-paid entry to paid, you will need to choose a Pay Item for the Timecard Entry.
If necessary, modify the Non-Productive Status. This field is defaulted by the setting associated with the Timecard Status selected. If you want to change the Productive status of a timecard entry, add or remove the checkmark. The Productive Status of a Timecard Entry determines how the particular timecard status is handled when calculating the technicians Billable Hour Efficiency for scoreboard reports.
Use the drop-down menu to select the department to which you wish to apply the timecard entry. For non-job-related entries, the employee’s default department will appear.
If the Timecard is a Paid item, the Pay Item will be displayed. Change it if necessary.
The employee’s pay rate will be displayed. This will come from the employee’s standard hourly rate in employee setup, or from the pay rate entry for the corresponding pay item.
If you wish to apply a premium rate for the block of time, select the Premium Code from the drop-down list.
If you have applied a premium code, choose the duration of the total timecard entry that should be calculated at the Premium Rate.
Click Accept.

Note: The Total Time (time out - time in) of any timecard entry can be broken down into five categories. Where it falls in the categories will determine how it is handled when preparing the payroll period.

Regular time- ordinary paid time that will accumulate and turn into overtime and effect regular/premium rate calculations.
Non-regular time- paid time that does not affect overtime and regular/premium rate calculations.
Premium time- time that is paid at a premium.
Non-paid time- time that is not paid.
Overtime- time that is paid at the overtime (OT) premium.

The Assignments option at the bottom of the screen includes a list of calls that the technician has been assigned to on that day. You can also view Other scheduled calls as well as Unscheduled calls, using this screen.

NTCs

NTCs are blocks of time on the employee timecard where there is no timecard entry. Successware fills in the gaps between defined timecard entries with NTCs. In employee setup you will determine whether or not the NTCs are paid or unpaid and whether the NTCs are counted as regular time. NTC entries are considered to be Productive Time by default for the sake of Scoreboard reports. If an employee is engaged in Non-Productive time, you must replace the NTC entry with a Non-Productive Timecard Entry to change the status.

NTCs cannot be edited but can be replaced by creating actual timecard entries to account for the time filled by the NTCs.

Note: Successware will only create NTCs on the current date or when making entries on the employee’s timecard on previous dates. NTCs will not be created on future timecard entries.

End of Day Punch Out

By default, Successware is set up with a Timecard status called DayEnded (End of Day Punch Out). This status allows you to create a timecard entry at the end of the workday for an employee that only requires an In time. Based upon the End of day punch out time Successware will:

Prevent the creation of timecard entries on the day after the punch out time.
If there is a gap in time between the last out time on the timecard and the End of Day Punch out time, Successware will create an NTC to account for the gap in time.
If there is an open timecard entry and an end of day entry is entered, the end of daytime will be entered as the Out time for the previous timecard entry.

Looking for a more interactive course on Payroll? Check out our Learning Management System (LMS)! Our courses are available to all Successware users. If you don't have a sign-in for our LMS, contact us at training@Successware.com for a free account.

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Classic - Payroll

Introduction

Accounting Flow

Where do the transactions post?

Earnings

Deductions and Other Employer Expenses

Checks/Disbursements

Payroll Setup

Payroll Setup - General Ledger Setup for Payroll

Payroll Setup - The Payroll Register Account

Adding a New Account to the Account Register

Marking an Existing Account as Your Default Payroll Account

Payroll Setup - The Payroll Setup Screens

Payroll Setup - Employee Setup

To Add an Employee

The Employee Setup Form

The Scheduling Tab

Wage Information Tab

Payroll Manager

Opening the Payroll Manager

Control Menu Options in the Payroll Manager

Other things to Consider

Estimated Labor Burden

Overtime

What is “Regular” pay?

Number of Hours

Premium Rate

Overtime options

Deferred Wages and Overtime Calculations

Timecard Entries

Pay Item Entry Automation

Manual Timecard Entries

Accessing the Timecard

Recording Timecard Entries

NTCs

End of Day Punch Out

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