Creating payroll categories
An employee’s pay is made up of separate components, such as normal time, overtime, union deductions, taxes, and so on. In your software, these components are called payroll categories, and they are grouped into five types: wages, accruals, deductions, employer expenses, and taxes.
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All monies paid to an employee for labor or services rendered on an hourly, salary, or other basis.
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Items such as vacation and sick leave, which employees accrue under the terms of their work agreement.
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Monies withheld by the employer and paid to other organizations on behalf of the employee, for example, union fees.
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Employer expenses
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Employer-paid benefits, for example, medical insurance.
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Amounts withheld by the employer from the employee’s paycheck and paid to a federal, state, or local government.
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A default list of payroll categories is generated when you create your company file. You may want to review these categories and tailor them to suit your business needs.
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Go to the Payroll command center and click Payroll Categories. The Payroll Category List window appears.
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Click the tab corresponding to the type of payroll category you want to create.
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You cannot create any tax categories. To view the tax table information, click the Taxes tab and then click the zoom arrow (
) next to a tax. Tax table information is set by a federal, state, or local government department. Any queries should be referred to that department.
) next to a tax. Tax table information is set by a federal, state, or local government department. Any queries should be referred to that department.|
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Make the required selections for the payroll category. See the following topics for information about the options available for each payroll category type:
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Select the employees whose pay will include this payroll category, then click OK.
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a Wage category, click Exempt and select the taxes and deductions that do not apply to the new category
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an Accrual category (and you have selected a percentage of gross wages or federal wages as the calculation basis), click Exempt and exclude those wage categories that should not be included in the accrual calculation
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a Deduction category, click Exempt and select the taxes that should be applied only to net pay (that is, to gross pay less the deduction amount)
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an Employer Expense category (and you have selected a percentage of gross wages or federal wages as the calculation basis), click Exempt and choose the wage categories that will not contribute to the value of the expense.
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Click OK.
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