21st Century Accounting Help - Payroll/Configure

Deductions

Use Payroll/Configure/Deductions to define an unlimited number of deductions for each company. Deductions are amounts that are subtracted from employees' gross pay. The 21st Century Accounting shorthand term for all types of deductions is "pay factors."

Configuring deductions

A deduction can be contributed to by the employee only or it can be paired with a contribution on the part of the employer. Depending on the deduction method, you can set up period ceilings and floors, an annual ceiling, the calculation (earnings) base for percentage deductions, the rate or flat amount, whether to make the deduction before or after calculating taxes, and some special elements for wage garnishments.

Finally, for all pay factors that are posted to the general ledger, you select the expense and liability accounts, as appropriate, for posting the factors.

If you do not select the departmentalization option, the deduction factor accounts are the accounts used for posting.

Assigning deductions to employees

You can assign a deduction to all employees when you configure the deduction. You can also assign deductions to (and remove them from) selected employees in the Payroll/Configure/Employees window, where you also customize deductions for individual employees, if necessary.

Posting deductions

The system calculates and subtracts the deduction amount from an employee's gross pay when you process Payroll for the employee and posts the deduction along with any employer contribution to the general ledger accounts assigned to the deduction.

If you select the option for departmentalization by G/L account segment in Payroll/Configure/Company Information, the expense and liability accounts you assign to pay factors that post to the general ledger (incomes, deductions, and taxes) are the "default" posting accounts. You then have the option to departmentalize each factor (or not). When you actually post paychecks using departmentalization, the system substitutes each employee's assigned department value for the department segment value in each factor's default account and posts expenses and liabilities for each employee to the accounts that are based on the employee's assigned departments.

If the company is configured to departmentalize pay factors by account segment and to allow manual distribution, and deductions are configured to post to the employee's departments, when you process Payroll, you specify departments as well as G/L accounts in the manual distribution window. The system then distributes deductions to departments in the same proportions as you distribute earnings.