Creating and adding payroll items for your client

Alerts and notices

Use the Payroll Items screen to define payroll items for clients and provide specifications for their setup, configuration, and behavior.

Note: After you have set up payroll items for a client, you can transfer that information to other client records:

See also: Client setup overview


To add a new payroll item, follow these steps.

  1. Choose Setup > Payroll Items, and then click the Main tab.
  2. In the Identification section, enter a unique description for the payroll item and specify the payroll item type (pay, deduction, or employer contribution).
  3. To display a different description on reports and checks for this payroll item, enter a name in the Report description field.
  4. For deduction items and employer contributions, select the appropriate agent from the Agent drop-down list for liability tracking purposes. If the agent is grayed out (unavailable), it must be selected on the employee record.
  5. In the Calculation section, the fields that are available differ depending on the payroll item type selected.
    • For a Deduction item, choose from a fixed amount, hourly rate - total hours, or percent of after tax pay, percent of gross pay, or percent of net pay. If the deduction amount is the same for all employees, specify the amount, rate, or percentage. In addition, you can mark the Weighted allocation checkbox to distribute fixed amount deductions across locations and departments. For more information, see Setting up weighted allocation of fixed amount payroll items.
    • For a Pay item, choose from a fixed amount, hourly rate, hourly rate - total hours, percent of gross pay, percent of sales, salary (hours sensitive), or salary amount. If the pay amount is the same for all employees, specify the amount, rate, or percentage. (Note that Piece rate is available in the Calculation type drop-down list, but is not currently supported.)
    • For an Employer Contribution, choose from a fixed amount, hourly rate - total hours, or percent of after tax pay, percent of deduction, percent of gross pay, or percent of net pay, and then specify the amount, rate, or percentage. Choose the Graduated option if you want to enter a tiered amount, rate, or percentage, and the limit for each tier. This is set up in the Graduated Table dialog.  In addition, you can mark the  Weighted allocation checkbox to distribute fixed amount employer contributions across locations and departments. For more information, see   Setting up weighted allocation of fixed amount payroll items.
  6. In the Special Type section, you can select a special type for the payroll item (pay or deduction item) that will affect how it calculates or reports. For information on the special types, refer to the help for the Special Type field in the Main tab).
  7. In the Auto-pay section, you can specify if you want to generate payroll checks automatically for employees with standard wages or salaries. Standard hours, for example, are 40 hours in a week, 80 hours biweekly, etc.
  8. In the Wage Type section, which is available only for pay items, specify the appropriate wage type, Regular or Supplemental.
  9. In the Multipliers section, which is available only for pay items, modify the multiplier rates for overtime and double time hours, if necessary. The default setting is 1.5000 for Overtime and 2.000 for Double time. The application applies the multiplier rates specified here to all new employee records and employee templates to which you add this payroll item. Modifying the multiplier rates here will not affect the multiplier rates that are assigned to existing employees or employee templates.
  10. In the Taxability section, you can specify if this payroll item should be exempt from FUTA and select the reason why. This information transfers to Line 4 of Form 940.
  11. In the Limit section, which is only available for deduction items and employer contributions, select how any deduction limits should be set.
  12. In the W-2 Additional Boxes section, mark the checkboxes for additional W-2 box codes to assign to this payroll item. The standard boxes will be populated based on the taxability of the item.
  13. In the General Ledger section, select the default General Ledger account number in the Liability or Expense field to be assigned to this payroll item.
  14. In the Miscellaneous Settings section, which is available only for deduction items and employer contribution items,
    • You can specify if the Health Savings Account (HSA) plan type is Individual (self-only coverage) or Family (spouse, child, or dependent coverage). Accounting CS automatically limits the maximum HSA contribution based on your selection here.
    • You can specify if a deduction is a health insurance deduction by marking the Health insurance checkbox. And, if it is, you can indicate if dependent care benefits are available through the health insurance item. When these checkboxes are marked, the health insurance indicators and corresponding start date for the deduction are automatically used in new hire files for states that require them. The Health insurance checkbox is not available if a Special Type Retirement/Cafeteria plan is selected.
    • You can mark the Require direct deposit allocation checkbox if you want Accounting CS to require that a direct deposit allocation be set up for that payroll item for any employee that uses it. The checkbox is not available if no agent has been selected, nor is it available for garnishment deductions.
  15. In the Exclusions section, specify the following information if it applies. For details about each checkbox and field, see the help for the Exclusions field in the Main tab.
    • Mark the checkboxes (Premium wages, Gross pay presentation, Net pay, Garnishment disposable income, or Weighted average overtime calculation) for amounts or calculations from which the payroll item should be excluded, if applicable.
    • If the payroll item is exempt from calculations for some or all accruable benefits using the Per hour worked method, make the appropriate selection from the drop-down list. If you choose the Selected option, click the Ellipsis button to open the Accruable Benefit Exclusion Details dialog and mark the checkboxes for the accruable benefits from which this payroll item should be excluded from calculations.
    • To exclude all or selected pay items from the basis for calculation of this payroll item (if it uses the Percent of gross pay or the Hourly rate - Total hours calculation type), choose Selected from the drop-down list and click the Ellipsis button button to open the Pay Item Exclusions dialog. For some examples of how to use this dialog, refer to the Pay item exclusion examples.
    • If the payroll item is exempt from some or all workers' compensation calculations, make the appropriate selection from the drop-down list. If you choose the Selected option, click the Ellipsis button button to open the Workers' Compensation Exclusion Details dialog and mark the checkboxes for the jurisdictions that are exempt.
  16. Click the Tax Exemptions tab and mark the checkboxes for any taxes from which the payroll item should be exempt. Deduction items marked to be exempt from taxes are treated as pre-tax deductions on the payroll check.
  17. To set up special frequencies and dates for a recurring payroll item, click the Special Timing tab to modify the frequency and dates for the payroll item.

Examples

The following articles provide examples of how to set up and work with payroll items to handle various situations.

Pay item exclusion examples

Exclude from gross pay presentation - examples

Enable auto pay distribution by percentage examples

Setting up employer contributions - examples

Employer contributions - Graduated table example