Payroll Incomes and Deductions
You will find the Incomes and Deductions setup options
in the Setup menu, under Settings,
and then Payroll.
When you process a
paycheck for an employee, any calculations that apply to the employee's incomes and deductions are calculated for
you in the paycheck window.
Incomes
Incomes are the cash and other material benefits that
employees receive in the course of their work. You can have up to 28
unique payroll incomes in Sage Simply Accounting. Depending on the income,
it may be subject to taxes; it may also need to be factored into vacation amount calculations.
To reduce your company set up time, Sage Simply Accounting provides a number
of pre-defined incomes whose applicable taxes cannot be changed. These
incomes have all of the calculations and taxes selected in accordance
with federal and state requirements. If you need
to add incomes other than those provided (for example, a car allowance),
check with the appropriate tax authorities to determine which taxes the
new income is subject to.
Incomes pre-defined by Sage Simply Accounting
Advances. This income
tracks pay advances that you might
provide to employees. You cannot change the applicable taxes for this
income.
Loans. This income
tracks pay advances, not subject to taxes, that you might
provide to employees.
Benefits. This income tracks taxable benefits subject to federal and state taxes.You cannot change the applicable taxes for this income. If you want to customize the kind of taxes you want to track for a benefit, you can set
up new payroll incomes.
Vacation Paid. This income tracks vacation pay that you have released to an employee. You cannot change the applicable taxes for this income.
Tips. This income tracks any tips an employee earns on the job. You cannot change any of the applicable taxes for this income.
Regular. This income
tracks hourly wages paid to employees. If you have staff that work on
salary, use the Salary income. You can change
the taxes that apply to this income.
Overtime 1 & 2.
These incomes track overtime pay that employees receive. Multiple overtime
incomes are provided in case you need to have two different overtime pay
rates. Their tax settings, however, should be the same. You can change
the taxes that apply to this income.
Salary & Commission.
Use these incomes to track employee salaries and commissions. If your
company doesn't pay employees by salary or handle commissions, you can
rename these incomes and change the applicable taxes.
Note: If the taxes
applied to any of the pre-defined incomes do not match the taxes that
apply to incomes specific to your company, use one of the undefined incomes
to set up a new income with the correct taxes.
Depending on your company's payroll incomes, you may
need to change some of their Income
Types.
Deductions
Deductions are monies withheld on employee paychecks. Depending on the deduction,
some or all taxes may have to be calculated before the deduction is subtracted from check. There are no pre-defined
deductions in Sage Simply Accounting, so will need to check with your federal
and state authorities to determine
which deductions you need to define and which taxes apply to specific
deductions.
Deduction types and examples
Statutory. Deductions that you are required to withhold for all employees. For example, federal and state income taxes.
Other Deductions.
You may be required to withhold monies from some employees for legal reasons.
For example, garnishments or family support deductions.
You may need to withhold monies from employees
because of company-compulsory deductions. For example, union dues or the
employee's portion of benefit plan premiums.
Some employees may opt to have monies withheld
voluntarily. For example, charitable donations or retirement plan contributions.
What do you want to do?
Set
up a payroll income
Set
up a payroll deduction