Revised: 02/22/2016
Go to Maintain>>Deduction/Benefit Master.
This program is used to add/edit and view deduction and benefit information. A deduction/benefit code is setup in this program and then applied to the employees. Defaults may be changed on an individual employee's tab 6 in the Employee Master.
Deduction codes are set up by the user and may be up to 4 characters in length (numbers and/or letters). The codes are used when setting up employee deduction information, in processing payroll and in the Create W2 process. The deduction codes are simply categories of deduction types, such as the following examples:
LT01 for Local Tax
CU01 for Credit Union
OP01 for Occupational Privilege Tax
UD01 for Union Dues
RT01 for Retirement
The codes and descriptions used for deduction codes can be set up to fit your company's needs.
For a deduction that has previously been setup, enter or select the deduction code to bring it up to view or edit.
NOTE:
You must have a deduction set up for Federal Income Tax, FICA (social security), Medicare and State Tax. These codes must be set up to assign your liability and or expense general ledger account numbers and to assign the check description for the paychecks. Do not fill in the Employee and Employer sections with amounts. The module will generally come with this information already setup.
The codes for these deductions must be as follows:
FWH This is the code for Federal Withholding.
MED This is the code you must have for Medicare.
SSEC This is the code you must use for FICA (social security)
SWH This is the code for State Withholding
Enter a description for a new deduction code or edit an existing description.
Enter a short description for the deduction/benefit. This description will be shown on the employee's check stubs.
Select one of the following types:
1. Employee Only
2. Employer Only
3. Employee and Employee
Defines if and when a report for this deduction will print during the payroll process.
Enter or select an auto print criteria.
The drop down menu contains the following selections:
<Undefined>
E - Every Pay
M - Monthly
N - No Auto Print
Q - Quarterly
NOTE:
You can print deduction reports from the report menu at any time.
Grouping deductions into categories allows the system to provide specialised reports and provide special functions for net payroll deductions.
A Category should be assigned to all deductions.
Select one of the following:
<<No Category Selected>>
<Undefined>
Child Support (the CS Max Percent should be assigned in the Employee Master>>6 Deductions/Expenses tab using the Advanced button)
Garnishment Priority 1
Garnishment Priority 2
Garnishment Priority 3
Garnishment Priority 4
Local Tax - (all local tax deduction codes should be set to this)
LST Tax
Other Disposal Inc Deduction
PA Local WorkSite
Unemployment Tax
Voluntary Deduction Priority 1
Voluntary Deduction Priority 2
Voluntary Deduction Priority 3
Voluntary Deduction Priority 4
Place a checkmark in the field if the deduction is to be a mandatory deduction. Deductions with a checkmark in the mandatory field will be deducted before other deductions that are not marked mandatory.
Paychecks may have only mandatory deductions withheld if the "Process Only Mandatory Deductions" box is checked during Payroll Processing.
For example:
Medicare and Social Security are mandatory deductions. Credit Union is not checked as a mandatory deduction. If a payroll is run with "Process Only Mandatory Deductions" checked, the deduction for credit unions would not be withheld even if is the correct cycle.
This field is used during the creation and printing process for W2s. Enter the W2 Box number for the deduction anytime prior to creating W2s. See Box codes listed below Employer W2 Box Code information.
This field is used during the creation and printing process for W2s. Enter the W2 Box number for the deduction anytime prior to creating W2s. See Box codes listed below:
Box 12 codes are:
A - Uncollected Social Security or Railroad Retirement Tax Act (RRTA) on Tips
AA - Roth Contributions under 401(k)
B - Uncollected Medicare Tax on Tips
BB - Roth Contributions under 403(b)
C - Taxable Cost of Group-Term Life over $50,000
D - Elective deferrals under section 401(k) cash or deferred arrangement (plan)
The Payroll program will automatically check the Retirement Plan box on the W2 for an employee who has a deduction/benefit code with this box code
DD - Cost of Employer Health Coverage
E - Elective deferrals under a section 403(b) salary reduction agreement
The Payroll program will automatically check the Retirement Plan box on the W2 for an employee who has a deduction/benefit code with this box code
EE - Roth Contributions under 457(b)
F - Elective deferrals under a section 408 (k)(6) salary reduction SEP
The Payroll program will automatically check the Retirement Plan box on the W2 for an employee who has a deduction/benefit code with this box code
G - Elective deferrals and employer contributions (including nonelective deferrals) to a section 457 (b) deferred compensation plan
H - Elective deferrals to a section 501(c)(18) (D) tax-exempt organization plan
The Payroll program will automatically check the Retirement Plan box on the W2 for an employee who has a deduction/benefit code with this box code
J - Non taxable sick pay
K - 20% excise tax on excess golden parachute payments
L - Substantiated employee business expense reimbursements
M - Uncollected social security or RRTA tax on taxable cost of group-term life insurance over $50,000 (for former employees)
N - Uncollected Medicare tax on taxable cost of group-term life insurance over $50,000 (for former employees)
P - Excludable moving expense reimbursements paid directly to employee
Q - Nontaxable combat pay.
R - Employer contributions to your Archer MSA.
S - Employee salary reduction contributions under a section 408(p) SIMPLE
The Payroll program will automatically check the Retirement Plan box on the W2 for an employee who has a deduction/benefit code with this box code
T - Adoption benefits
V - Income from the exercise of non statutory stock option(s)
W - Employer contributions to a health savings account (HSA)
Y - Deferrals under a section 409A non qualified deferred compensation plan
Z - Income under section 409A on a non qualified deferred compensation plan.
Enter the box number and code for box 12:
For example:
12E
Box 14 codes are 14 with a user entered 2 character code. Blank spaces are not allowed and a dash should not be used as one of the 2 characters.
For example:
14IN
If the deduction code does not need to be reported on the W2, leave this field blank.
Default information entered in the deduction/benefit master will be on the employee's deduction view when a deduction is being setup. Deduction defaults may be changed for each employee in the Employee Master during the setup process or edited at a later time.
Enter a DGR Code in this field if you need to exclude some earnings when the deduction is calculated upon the gross earnings. Earnings will be excluded based upon the earnings codes tied to the DGR code.
DGR codes are setup and maintained in the Deduction Gross Reduction Master.
If no earnings are to be excluded when calculating the deduction, leave this field blank.
Enter a group classification of your own choosing. Group classifications are used to create one report from many deduction codes. This may be useful when you have several deduction codes for the same type of deduction.
Groups will also be subtotaled on the check register or payroll summary.
NOTE: If some of your deductions are not grouping check that the code is entered (spelling) the same on all the deductions you want grouped together.
For example: If you use a separate Local Tax code for each municipality, you could generate one report with all the local tax codes combined if they were all coded with a group code of LOCAL.
The local taxes would also be subtotaled on the payroll summary.
Enter a check group classification of your own choosing. The check group classification is used to create one line on the employee's check from many deduction codes.
Example: John has 3 insurance deductions which can be printed as a one line total on his pay check stub by putting in a Check Group Classification of Insure for all of the deduction codes.
Enter or select a deduction cycle from the following list:
0 - Every Pay
1 - First Pay of Month
2 - Second Pay of Month
3 - Third Pay of Month
4 - Fourth Pay of Month
5 - First and Second Pay Only
6 - First thru Fourth Pay Only
L - Last Pay of Month
X - User Defined 1
Y - User Defined 2
Z - User Defined 3
These cycles correspond to the Pay Day Master Deduction Cycles and are used to determine when a deduction will be withheld.
Most deductions are Y - Taxable. Many Retirement and Health Insurance plans may use one of the Non Taxable options. If you do not know which option applies, please contact the provider. Defaults may be changed on an individual employee's deduction tab in the Employee Master.
Select one of the following:
B - Non Taxable (Fed/SocSec/Medicare) - Amount will be deducted from gross pay prior to the calculation of federal income, social security and medicare taxes being withheld.
F - Non Taxable (Federal) - Amount will be deducted from gross pay prior to the calculation of federal income taxes being withheld.
S - Non Taxable (SocSec/Medicare) - Amount will be deducted from gross pay prior to the calculation of social security or medicare taxes being withheld.
Y - Taxable (Fed/SocSec/Medicare) - Amount will be deducted from gross pay after federal, social security and medicare taxes are withheld.
Most deductions are Y - Taxable. Many Retirement and Health Insurance plans may use one of the Non Taxable options. If you do not know which option applies, please contact the provider. Defaults may be changed on an individual employee's deduction tab in the Employee Master.
Select one of the following:
B - Non Taxable (State/Local) - The deduction will be withheld from gross pay before the calculation of state and local taxes is done.
L - Non Taxable (Local) - The deduction will be withheld from gross pay prior to calculating the withheld amount for local taxes.
S - Non Taxable (State) - The deduction will be withheld from gross pay prior to calculating the withholding for State taxes.
Y - Taxable (State and Local) - The deduction amount is withheld from gross pay after state and local taxes have been withheld from gross.
If the deduction is for employer only, leave the employee fields blank.
Enter in a default amount for the deduction. Defaults may be changed on an individual employee's deduction tab in the Employee Master.
For Example:
For a deduction whose amount is $40.00 for 10 people and $20.00 for 2, enter the $40.00 as the default amount. Then adjust the amounts for the 2 employees who have the $20.00 when entering/setting up the deduction in the Employee Master.
Enter or select a type from one of the following:
$ - Dollar Amount - The amount will be withheld as a dollar amount.
% - Percent Amount - The amount will be withheld as a percentage.
H - Based on Hours - The amount will be withheld as a dollar amount, based on the number of hours worked.
N - Net Based on Percent - The amount will be withheld as the percentage entered calculated on the net pay amount.
For a deduction with no limit on the amount you must enter 99999.99 in this field. For a deduction with a cut off amount, enter it here.
For Example:
A deduction has a $52.00 maximum entered. Once the deduction has reached the amount of $52.00 in the YTD Employee column, it will no longer take the deduction out of the employee's pay.
When the Payroll End of Year Process is run the system compares YTD amounts against their maximum. If the maximum and the YTD amounts are the same the system will zero out both the YTD amount and the maximum unless the Retain Max at Year End is checked.
Deductions with a zero maximum amount will not be taken out for the new payroll year. This process assures that deductions for a one time amount do not get taken out in the new payroll year when payroll is reset.
Deductions with all "9"s as maximums never have their maximum amounts reset and their YTD amounts are zeroed.
For deductions whose YTD amounts are lower than their maximums (other than maximums of 99999.99) a calculation is performed to reduce the maximum by the amount paid for the year and the YTD amount is zeroed out. This process allows deductions with an amount whose maximum is not reached within a payroll year to continue into the new payroll year with the maximum reset to the new lower amount owed. The calculations are needed to assure that the deduction is not overpaid.
For Example:
Emergency Service Taxes have a yearly maximum of $52.00. The Retain Max at Year End should be checked because the YTD amount and the maximum amount will agree but the deduction should continue to be taken out in the new payroll year for the same maximum of $52.00.
An employee owed the company $500.00 at the beginning of the payroll year. A deduction was setup with a maximum of $500.00 and a deduction amount of $100.00 per pay. Retain Max at Year End should not be checked because the YTD amount and the maximum will agree, the YTD amount and maximum should be reset to zero to assure that the deduction is not taken out in the new payroll year.
An employee has a garnishment for payroll of $5000.00. At the end of the payroll year his YTD amount was $2600.00. Retain Max at Year End should not be checked to allow the system to reset his maximum amount to $2400.00 for the new payroll year. The system will subtract the amount he has already paid from the total amount due (his maximum of $5000.00 - $2600.00) and update his maximum to $2400.00 in the new payroll year. The garnishment will stop in the new payroll year when the maximum of $2400.00 is met.
If the deduction is for employee only, leave the employer fields blank.
Enter in a default amount for the deduction. Defaults may be changed on individual employee records in the Employee Master.
For Example:
For a deduction whose amount is $40.00 for 10 people and $20.00 for 2, enter the $40.00 as the default amount. Then adjust the amounts for the 2 employees who have the $20.00.
Enter or select a type from one of the following:
$ - Dollar Amount - The amount will be withheld as a dollar amount.
% - Percent Amount - The amount will be withheld as a percentage.
H - Based on Hours - The amount will be withheld as a dollar amount, based on the number of hours worked.
N - Net Based on Percent - The amount will be withheld as the percentage entered calculated on the net pay amount.
For a deduction with no limit on the amount you must enter 99999.99 in this field. For a deduction with a cut off amount, enter it here.
For Example:
A deduction has a $52.00 maximum entered. Once the deduction has reached the amount of $52.00 in the YTD Employee column, it will no longer take the deduction out of the employee's pay.
When the Payroll End of Year Process is run the YTD Employee amounts in the Employee files will be reset to zero unless Retain Max at Year End is checked.
For Example:
If the deduction is for a garnishment that will not be paid in full before the end of the year, then the Retain Max at Year End should not be checked so that the correct total amount is withheld for the deduction.
If the deduction is for an amount that is paid in full before the end of the year, but the deduction should be taken out for the full amount in the next payroll year, Retain Max at Year End should be checked.
Check this field if the system should use the General Ledger information in the PR Distribution Master for this deduction.
If checked and used as a deduction code for an employee, you will need to have the employee's general ledger wage account(s) setup in the PR Distribution Master.
Deductions require that you enter the General Ledger accounts that will be affected.
For a deduction type of <1>, only the employee segment will be used.
For a deduction type of <3>, both the employee and employer segment will be used.
Enter the General Ledger account to be credited in association with the deduction code. In most cases, this will be a liability account.
NOTE: A valid account must be found before continuing. If a valid account is entered, the account description will be displayed to the right of the account.
This field will be dimmed if the deduction is for the employer only.
Enter or select the general ledger account to credit for the employee if not dimmed.
Deductions require that you enter the General Ledger accounts which will be affected.
For a deduction type of <2>, only the employer segment will be used.
For a deduction type of <3>, both the employee and employer segments will be used.
These Employer Segment fields will be dimmed if the deduction is for employee only.
Enter or select the General Ledger account to be credited in association with the deduction code. In most cases, this will be a liability account.
NOTE: A valid account must be found before continuing. If a valid account is entered, the account description will be displayed below the account.
Enter or select the General Ledger account to be debited in association with the deduction code. In most cases, this will be an expense account.
NOTE: A valid account must be found before continuing. If a valid account is entered, the account description will be displayed below the account
Setting up information on this page will allow deduction/benefit information from payroll to interface to the accounts payable recurring entry program or the AP Wizard program during the payroll process.
Enter or select a valid vendor number. The vendor selected would be the vendor receiving the check for the deduction amount withheld.
Vendor Numbers and information are setup and maintained in the Vendor Master.
Enter or select a Recurring Entry Number to interface payroll deduction information to.
Recurring Entry Numbers are setup and maintained in the Horizon Financial Module.
Select a frequency from the drop down list.
Additional frequencies may be added in Settings>>Global Table Maintenance under type APRECUR-01.
Select a payment frequency. If no frequencies are shown, please call the Horizon Help Desk at (814) 535-7810.
Select one of the following:
Standard Process
Auto Payment/Check Process
Auto Create Voucher Only
<Undefined>
Check this field if the deduction will be paid electronically and use the electronic check numbering system. ACH/Electronic information is entered for the Vendor in the Vendor Master.
Enter a check number to associate with the deduction when using Electronic Payment is checked.
Enter your account number with the vendor selected, if applicable.
Enter the name of the site where employees who have this Deduction Code will be working.
Enter the street address for the site.
Enter additional address information for the site. If this field is not needed it may be left blank.
Enter the name of the city for the work site.
Enter the state where the work site is located.
Enter the zip code for the work site.
Enter the area code and phone numbers for phone 1 and phone 2. Phone numbers are not used by the system and may be left blank.
Enter the name used to send tax information to the Federal Government.
Enter the site's Federal ID.
Enter the name of the municipality the site is located in.
Enter the name of the county the site is located in.
Select a PSD Code for the site.
Enter the Local Account information.
Opens the Department Code List program.
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Go to Maintain>>Deduction/Benefit Master>>Global Changes
Use this program to change deduction information for deductions that have already been setup in the Employee Master for employees.
Select a deduction or benefit code
Select Global Changes
Depending on the Parameter Type for the deduction/benefit selected you will be able to change information for Employee, Employer or both
Place a check mark in the box(es) that are to be updated for the Employee and Employer Amount, Type, Maximum or all three. If a box is not checked the information will not be updated.
Enter or select the Amount, Type or Maximum information to be updated.
Place a check mark in the Box(es) and select the appropriate information for Cycle, Taxable Federal, Taxable State or DGR Code information. If a box is not checked the information will not be updated.
Press the update button to initiate the change to all of the employee files who already have this deduction in place.
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Go to Maintain>>Deduction/Benefit Master>>Global Additions
Use this program to add a deduction and the default information entered here to all employee files.
Select a deduction or benefit code
Enter the following information for the Employee, Employer or both for the Deduction or benefit.
Amount
Type
Maximum
Cycle
Taxable Federal
Taxable State
DGR Code
Select Global Additions
Press the update button to add the deduction/benefit to all employees.