View this slide show with the Notes Page activated Then use the bar on the righthand side to scroll down to read more Commonwealth VernacularDefinitions Agencies DOA VRS DHRM ID: 598843
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Payroll Overview
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View this slide show with the Notes Page activated. Then use the bar on the right-hand side to scroll down to read more.Slide3
Commonwealth Vernacular/Definitions:
Agencies: DOA, VRS, DHRM
Systems: BES, PMIS, VNAV, CARS, CIPPS, PAT
Payroll OverviewSlide4
Payroll Overview
Paying employeesProcessing court ordered withholdingsManagement
Review/Audit of payroll entries
Reconciliations
Adjustments
Preparation of regulatory informationSlide5
Payroll Overview
Importance of payroll to the agencyCost of Personal Services and Fringe Benefits as a percent of total agency expenditures
Employee morale is affected by payroll administration
Payroll controls and administration go beyond the
system – human interaction is requiredSlide6
Payroll Overview
Importance of Payroll Administration to Agency Fiscal ManagementHigh exposure area of responsibility
Opportunity for
fraud when internal controls are not applied
High risk function
Potential for
error or fraud
Safeguard of Commonwealth assetsSlide7
Payroll Overview
Agency Fiscal Management must be the controlling party to ensure the accuracy of payroll and payroll related expenditures.Management Review, Establishment of Policy, and Adherence to Procedures are integral controls outside of the system
Payroll Administration goes beyond payroll processing. Paying employees is only one facet of the responsibilities of Payroll AdministrationSlide8
Payroll Overview
Payroll Administration is comprised of several facets of responsibilitiesCompliance with Federal and State Tax laws and Regulatory
reporting
Compliance with Federal Labor Law for FLSA and Wage and Hour Laws
Administration of Benefits for
employees to include disbursement to the receiving entity
Accounting of Payroll and Benefit Expenditures in CARSSlide9
Payroll Overview
Agency Liability for Non-Compliance with Federal and State RegulationsPenalties for non-compliance
Amounts
for under-withholding of GarnishmentsSlide10
Payroll Overview
TYPES OF EMPLOYEESSalaried – Classified/Faculty
Automatic-no pay transaction is required to pay the employee
Paid a predetermined amount
Virginia Personnel Act
The Comptroller of Virginia establishes the pay dates for classified employees
...moreSlide11
Payroll Overview
TYPES OF EMPLOYEES cont.Hourly - Wage-Non AutomaticPay transaction is required to pay the employee.
Paid a predetermined hourly rate for hours worked;
Payment is for a prior pay period rather than current;
Not entitled to state funded benefits;
Limited to 1500 hours in an anniversary year, and
Automatically eligible for overtime.Slide12
Payroll Overview
TYPES OF PAYMENTS AND PAYROLL CALCULATIONSSalary payments
Wage payments
Overtime payments (FLSA impact)
Shift Differential payments
...moreSlide13
Payroll Overview
TYPES OF PAYMENTS AND PAYROLL CALCULATIONS cont.Special Pays for Supplemental Payments
Any additional money to be paid to an employee:
Moving/Relocation,
Workers Compensation,
Disability Benefits,
Leave Payouts, etc.Slide14
Payroll Overview
TYPES OF PAYMENTS AND PAYROLL CALCULATIONS cont.Special Pays for Fringe Benefits
Imputed Life - Considered a benefit by the Federal government if a “salaried” employee’s annual salary exceeds $25,000
Company Car
...moreSlide15
Payroll Overview
WITHHOLDINGS FROM PAYDeductions
Fixed Dollar Amounts
Percentages
Based on Net Pay
Based on Gross
PayBased on the value of a specific special pay or a combination of pays
...moreSlide16
Payroll Overview
WITHHOLDINGS FROM PAY cont.TaxesFederal Income Tax (FIT)
W-4 Form for withholding
W-4’s claiming exempt status
...moreSlide17
Payroll Overview
WITHHOLDINGS FROM PAY cont.TaxesState Income Tax (SIT) Virginia and other states
Reciprocal Taxing ( i.e. Maryland)
Local Income Tax Withholding
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Payroll
OverviewWITHHOLDINGS FROM PAY cont.TaxesFIT – Federal Income
FICA
(OASDI
plus
HI)
OASDI Rate/Limit - 6.2%, up to the established limit stated on the Social Security Administration website (SSA.GOV)HI – 1.45% with no limit
Slide19
Payroll
OverviewMANDATORY DEDUCTIONS
Retirement – for salaried
employees
Hybrid Plan: Deferred Compensation of 1%
Court Ordered Deductions
GarnishmentsTax Levies
Child/Spousal SupportBankruptcyGarnishment FeeSlide20
Payroll Overview
VOLUNTARY DEDUCTIONSBenefits/Voluntary DeductionsCombined Virginia Campaign
Deferred Compensation/Annuities –Alternative Retirement Contribution Plans
VPEP/VEST-Virginia College Savings Plans
Parking
Flexible Spending AccountsSlide21
Payroll Overview
Deferred Compensation and Annuities Limit on withholdings for an annual period
Applicable Tax Exclusion from FIT and SIT
Slide22
Payroll Overview
Healthcare Different providers available to State employees
Applicable Tax Exclusion
Rates are determined by DHRM
Direct Deposit- Required
Direct Deposit of a Fixed Amount or a
Percentage of Net PaySlide23
Payroll Overview
FRINGE BENEFITS CALCULATED AS AGENCY PAID DEDUCTIONSAgency paid
Health Care
Group
Life Insurance
Retiree Credit
Long term Disability Insurance Cash Match
Slide24
Payroll Overview
MONTHLY RECONCILIATIONS/REVIEWSTax Profile/Accumulator Reconciliation Healthcare Reconciliation
VRS Reconciliation
VEC New Hire Reporting Slide25
Payroll Overview
QUARTERLY RECONCILIATIONS/REVIEWSQuarterly Certification to DOA – Control Totals Database
IRS – Form 941 - Required Reporting Reconciliation
of Tax
Deposits of Wages
and Taxes
Unemployment Wage Reporting to VECSlide26
Payroll Overview
ANNUAL RECONCILIATIONS/REVIEWSAnnual Certification of taxable wages and taxes withheld for W-2 preparation
Reporting to Department of
Taxation
Reporting to Other StatesSlide27
Payroll Overview
DOA ResponsibilitiesSchedules the processing of all payrolls
Performs VA State
and Federal regulatory reporting
Establishes
and controls security to
CIPPS and PaylineEnsures all certified payrolls are processed by the due date
Ensures timely response to agency questions and concernsProvides training to agency personnel
Provides on-site assistance when justified
Develops and coordinates changes to CIPPS
Issues Payroll Bulletins and maintains the CAPP Manual
Slide28
Payroll Overview
Agency ResponsibilitiesProvides accurate and timely payments of employees
Timely
entry into PMIS,
BES, VNAV,
CIPPS
Collects and maintains payroll source documentsAuthorizes and certifies payroll data
Establishes internal controlsEnsures separation of dutiesSlide29
Payroll Overview
Education:Additional education opportunities are available through other organizations including: The American Payroll Association (APA)
http://www.americanpayroll.org/
Local APA chapters statewide
Certifications for FPC and CPP