SETUP > PAYROLL > Payroll Account Types
Payroll Account types have been created to enable the user to define the direct, indirect, G&A (general & administrative) accounts that can be associated with the payroll and benefit function. Employer costs related to the HR function such as salary and wages, bonus, commissions, vacation pay, employee benefits, employer component of payroll taxes can now be precisely allocated to the appropriate company, GMU, LMU, department and expense account. By defining codes for different type of payroll & employee benefit expenses, we are able to capture this data in tremendous detail at the employee level.
Since organizations are built around cost centers or departments to better track expenses. PR Account Types helps the user categorize expenses at the departmental/ LMU/ GMU level or the lowest level of detail.
Once the PR Acct Type is associated with an expense category, the system automatically posts the transaction to the appropriate account as defined within the Payroll Acct Type.
SETUP > PAYROLL > Payroll Employee Vacation / Paid Time Off (PTO)
Whether your company has vacation time or paid time off policies it is critical for an organization to keep track of the employer liability related to these type of expenses. In the USA, Paid time off (PTO) is a feature in some organizations that provides a “reason resource” of hours that an employee can draw from to take time off from work, without having to specify a reason.
Generally PTO hours cover everything from planned vacations to sick days. Unlike more traditional leave plans, companies with PTO plans do not separate time off from work between “vacation days” and “sick days”. Depending upon the companies PTO policy, the user can define the different level of PTO time available to employees depending upon job levels and employee classifications
SETUP > PAYROLL > Payroll Employee Type
Workers within an organization can be categorized as full-time, part-time, casuals or independent contractors. Each company will have its own unique set of classifications to identify employee types.
SETUP > PAYROLL > Payroll Employee Status
An employee status is defined by the type of job duties an employee performs. Factors such as the level of decision-making authority, the method of compensation determines whether the employee is exempt, nonexempt or an independent contractor or 1099 employee. This section enables the user to create those codes which later can be associated with an employee.
SETUP > PAYROLL > Payroll Employee Setup Costs
During the budgeting process the accountant has to estimate the additional cost for new hires especially if your job requires them to be mobile and travel outside the office. The employee setup section assist the user in identifying standard monthly costs related to new or existing employee such as auto, travel, meals, tolls, cell phone etc.. By simply selecting the checkbox in the Manage Base Pay section – for payroll employee setup costs, CFO insight will automatically calculate and post to the appropriate expense accounts the standard monthly costs. This section enables the user to define all the standard fixed monthly costs and associate them with general ledger expense accounts so when selected at the employee level, CFO Insight will automatically calculate the fixed monthly costs for the selected employees.
SETUP > PAYROLL > Payroll Taxing Authority
Any government entity that is authorized by law to assess, levy and collect taxes is a taxing authority. Depending upon the approach you choose in calculating payroll taxes one can define the taxing authority at these federal state and local levels or choose to use only one type of taxing authority and use it for an overhead calculation for all employees regardless of the state they are located in. The advantage of this approach is to simply state that the company estimates a percent overhead cost for each employee related to payroll taxes and then associate that calculation to each employee. You have the choice to be as detailed as you may like or use a less detailed approach.
SETUP > PAYROLL > Payroll Taxes
The employer cost of payroll taxes ranges from federal taxes such as Social Security, Medicare, federal unemployment tax (FUTA), to state unemployment taxes, state disability insurance, state health insurance etc. It is in this section that the user will define each of the components that will enable an accurate calculation of the employer portion of payroll taxes. Depending upon the type of tax that needs to be set up the user has to define the code, taxing authority, state ID, wage limit and the tax rate.
Each employee would then be associated with the appropriate tax codes. This would be the most detailed and accurate way of calculating the employer cost of payroll taxes. A hybrid method could also be used to calculate the overall burden of such taxes. In this approach one would simply set up one code for overhead payroll expenses and apply that to all the employees. One may choose to split this between federal overhead and state overhead.