Third Party Sick Pay - PowerPoint Presentation

Third Party Sick Pay How To Enter and Report

BasicOverview 1 Employee/Employer/Union has invested in a disability package Employee is now disabled and being paid per plan specifics from a third party, and the money the employee is receiving is most likely taxable. You will receive information from the third part as to what was paid out to the employee. You may receive it weekly, monthly, quarterly, or even once per year. Even though you did not give the money to the employee, you must pay the employers portion of FICA and you will most likely need to produce a W2 . 2 3 4

Third Party Sick Pay 1Planning for Reporting of Third Party Sick Pay Who has to do the W2? Is the money that is paid to the employee taxable? How often should I enter this ? When should I record this so it is on my 941 Quarterly Report? Has this employee worked for you at all in the calendar year ? - If “Yes”, run a FUTA and SUTA report for the employee - If “No”, make sure the employee is entered in FSI

Question #1

Third Party Sick Pay 2Set Up a Third Party Sick Pay Earn Code and watch the W2 tab set up You only have to do this once

Third Party Sick Pay 3Two History Sets Adjustments First one to record the Employers’ Portion of taxes and taxability This must be posted It must hit the GL in the desire quarter Once posted it must be purged before entering the next adj Second one to record the Employees’ withholding for W2 purposes This most be posted It must NOT hit the GL Once posted, it must also be purged.

Third Party Sick Pay !!YOU CANNOT ENTER 3 rd Party SICK PAY ADJUSTMENTS IF THERE IS CURRENT PAYROLL IN THE SYSTEM - PURGE ANY POSTED TIMECARDS!

Question #2

Third Party Sick Pay History Adjustment Steps 1Enter History Adjustment # 1 – Through Enter History Adjust (Not Adjustment Genie) Record the EMPLOYER portion of Social Security (6.2%) and taxable & gross amounts only. Record the EMPLOYER portion of Medicare (1.45%) and taxable & gross amounts only. Record the FED and STATE ( if applicable ) taxable & gross amounts only Record FUTA taxable & gross Only (Unless EE has not met limits) Mark the first sentence at the bottom of the screen On Earnings Tab - Record 7.65% of Amount Paid against the TPS earn code On “SUTA” Tab – Record SUTA taxable & gross only ( unless EE has not met limits ) Enter to Save

Third Party Sick Pay History Adjustment Steps 1Enter History Adjustment # 1 – (Continued) COMPUTE PR Remove Misc & Union Deduction cycles Mark “Positive” Mark “History Adjustments Only” Proof with pre-check registers POST ADJUSTMENTS Post Date = Any check date in 941 quarter you have not reported Bypass GL Update = No PURGE Timecards!

Third Party Sick Pay History Adjustment Steps 2Enter History Adjustment #2 – Through Enter History Adjust (Not Adjustment Genie) Record the EMPLOYEE portion of Social Security (6.2%) only. Record the EMPLOYEE portion of Medicare (1.45%) only . Mark the SECOND sentence at the bottom of the screen Enter to Save

Third Party Sick Pay History Adjustment Steps 2Enter History Adjustment #2 – (Continued) COMPUTE PR Remove Misc & Union Deduction cycles Mark “Positive” Mark “History Adjustments Only” Proof with pre-check registers POST ADJUSTMENTS Post Date = Any check date in 941 quarter you have not reported Bypass GL Update = YES PURGE Timecards!

Filing941s 1 941 Quarterly Will Record Appropriately Employer’s Portion Must be paid 2 3 6

Third Party Sick PayLocal Taxes Local Taxes - You can opt to record it as if you (employer) paid it - On occasion (PA in particular) Local Taxes need to be paid on TPS payments - You can opt to record it and accru e it if you expect the employee to come back to work.

Question #3

Questions Learning the game is half the battle

Thanks for Attendingwww.foundationsoft.com email@foundationsoft.com Third Party Sick Pay