CenterPoint Fund Accounting - Deductions & Benefits

Deductions & Benefits Video - Duration: 14 min 35 sec

 

Document #:	3131	Product:	CenterPoint® Payroll

 

Deductions and benefits represent the voluntary deductions from an employee’s check as well as the additions made by the employer with wage or non-wage employer contributions that are calculated at the time of the payroll. If the employer offers health insurance, a portion of the premium payment may come from the employee and a portion from the employer. Both can be calculated during a pay run and set aside in a Liability account to be paid to the insurer.

Typical deductions/benefits are 401K contributions, dependent care (125), flexible spending account, garnishments, health insurance, payroll advance repayment, union dues, etc. The CenterPoint Payroll system comes with several predefined deductions/benefits. Deductions and benefits are normally set up before you set up employers or employees.

When you create a new deduction/benefit, it is automatically added to all employers in the database. The deductions/benefits schedule and deductions/benefits frequencies selected when processing a payroll controls which deductions/benefits will be included in the pay run.

Tabs
General	Limits	Taxes	Earnings

This topic includes instructions on how to:

Step A - Create a Deduction/Benefit

Step B - Add the Deduction/Benefit to an Employee Record

Step C - Add a Deduction/Benefit to Multiple Employee Records

Additional topics included: 

• Activate/Deactivate a Deduction/Benefit for an Employer
• Activate/Deactivate a Deduction/Benefit for an Employee
• Change an Existing Deduction/Benefit
• Delete a Deduction/Benefit
• Delete a Deduction/Benefit from an Employer
• Delete a Deduction/Benefit from an Employee

---

Step A - Create a Deduction/Benefit:

1. Select Setup > Payroll Details > Deductions & Benefits.
2. Click New,or if the new deduction/benefit will be similar to an existing, highlight the similar item and click Copy instead of New.

General tab

3. Enter an Abbreviation (up to ten unique characters of information) that you can easily identify the deduction/benefit by. For example, HI for Health Insurance or 4K for 401K.
4. In the Name box, enter up to 35 characters of required information that describes the deduction/benefit.
5. In the Type box, select a deduction/benefit type. Deduction/benefit types assign the taxability to a deduction/benefit and are also used for reporting purposes. The deduction/benefit type options are listed below:

• Retirement Plan - Non-taxable
• Retirement Plan - Taxable
• Cafeteria Plan (Section 125)
• Insurance Plan Taxable
• Garnishment
• Other Taxable Deduction/Benefit
• Other Non-Taxable Deduction/Benefit
• Payroll Advance Repayment
• Other Non-Taxable Ded./Taxable Ben.
• Other Taxable Ded./Non-Taxable Ben.

6. If you selected Garnishment as the deduction/benefit Type, in the Sequence box, enter the order the garnishment should be deducted from the check, for example Sequence 1 will be deducted before a garnishment assigned a Sequence 2.
7. In the Contributor box, select whether or not this will be just a deduction (employee), a benefit (employer), or both. Depending on what you select will determine whether or not the Employee Detail or Employer Detail sections on the General tab are enabled.

8. In the Liability Account box, select the liability account this deduction/benefit should post to. The Liability Account also controls who the deduction will be paid to.

9. If Employer or Both is selected as the Contributor, select the expense account this deduction/benefit should be posted to in the Expense Account box. If Employee was selected as the Contributor, the Expense Account should be left blank.

10. The Active check box will automatically be selected. When the check box is not selected, the Deduction/Benefit will not be listed as a selection in Setup > Payroll Details > Employers unless the Employer already has the Deduction/Benefit selected.
11. To add notes to this deduction/benefit, click Additional Notes, enter the notes, and then click OK.

Note: To add a time stamp to a note added or edited on the Additional Notes screen, click Stamp. If you are adding/editing a stamp in a database without security, the stamp will display "Edited on (current date and time)". If you are adding/editing a stamp in a database with security, the stamp will display "Edited by (username) on (current date and time)".

12. Employee Detail (will only be available if Employee or Both was selected in the Contributor field):

• W-2 Options - Select the W-2 box that this amount should be reported in. If this amount is not reported on the W-2, leave the W-2 Box – Options box blank. When you select codes Box 12 D, E, F, G, H, S, Y, AA, BB, CC, DD, EE, GG and HH for either the Employee or Employer , the appropriate code and value for the W-2 will be displayed when data is transferred to Aatrix. Box 12 codes and values will not display onthe W-2 when data is transferred to Aatrix for the codes not listed in this step. If the selections are the same for the W-2 Box - Options for both the employee deduction and employer contribution, then the amounts will be reported together. 401(k) reporting is a good example where the W-2 reporting is different. Employee deferrals are reporting in Box 12 with code D, but employer matching is not required, but can be reported in Box 14.

Note: Changes to W-2 information flow down to all existing pay in the system. So, if you mistakenly used W-2 Box 12, code E throughout the year when you should have used code D instead, changing the code will also change each W-2 issued to the code.

• In the Employee Method box, select the appropriate option. The option selected defines the boxes that will display next.

• Fixed Amount - Rate box will display with $0.00.
• Garnishment - Rate box will display with 0.00%, Up to Amount will display as 0.00 and Minimum Net Pay will display as 0.00.
• Hourly Rate (All Hours) - Rate box will display $0.00.
• Hourly Rate (Regular Hours) - Rate box will display with $0.00.
• Payroll Advance Fixed Amount - Amount will display with $0.00
• Percent of Gross Wages - Rate box will display with 0.00% and Minimum Amount will display as 0.00. When processing a payroll, if the calculated deduction amount is less than the Minimum Amount value, the deduction amount is set to the Minimum Amount value.
• Percent of Net Wages (After Taxes) - Rate box will display with 0.00%.

• In the Schedule box, select when the deduction/benefit should be deducted from the employees pay. For example, if this garnishment is withheld every pay check, use the schedule Monthly Pay Periods 1,2,3,4,5. If it's withheld only once a month, select Only 1st Pay Period of Month. Deduction and benefit schedules allow you to select a schedule of when to calculate a deduction and/or benefit for employees on a pay run. Schedules are a grouping of one or more deduction/benefit frequencies. When a frequency is selected on a pay run, CenterPoint Payroll determines which schedules apply for each employee. If the frequency is contained in a schedule, then the deduction/benefit will be calculated on the pay run. Use the table below to determine which frequencies will be included in the pre-defined deduction and benefit schedules.) that applies to this deduction/benefit.
  • Predefined Deduction & Benefit Frequencies:

Abbreviation	Name
1stOfMonth	1st Pay Period of the Month
2ndOfMonth	2nd Pay Period of the Month
3rdOfMonth	3rd Pay Period of the Month
4thOfMonth	4th Pay Period of the Month
5thOfMonth	5th pay Period of the Month
Special	Special Pay Period

• The Rate, Up to Amount and Minimum Net Pay boxes should all remain at zero when setting up the deduction/benefit. When the deduction/benefit is added to an employee, the rates and amounts will be specified on their record.

13. If Employer or Both was selected in the Contributor field, the Employer Detail section will be available. These fields are used to define the details of an employer provided benefit. Select the appropriate options for the Employer Method, Schedule, and Rate fields as was done for the employee.

Limits tab

14. Employee/Employer Deduction Limits provide an additional way to stop the calculation. If the deduction/benefit has an monthly, annual or lifetime limit, click on the Limits tab and select the Use Limit box. The employee amounts should remain zero. When the deduction/benefit is added to an employee, the limits can be specified on their record. A deduction may have more than one limit, such as it may have a Monthly limit as well as an Annual limit.
15. The Employee/Employer Non-Taxable Limits provide an additional way to set an annual non-taxable limit and stop the calculation when the limit is reached. If a limit applies, select the Limits check box, enter the Annual Limit, and then select the action you want to take when the limit is reached.

Taxes tab

16. Click the Taxes tab. The taxes tab allows you to decide if an employee deduction should be calculated before or after taxes and if an employee is responsible for paying taxes on a benefit provided by the employer.

The first two columns (Employee Detail) are used for only those deductions/benefits that have had Both or Employee specified as the Contributor. If a deduction should be subtracted from an employee's pay prior to calculating a tax, that tax or taxes should be moved to the Exclude Deduction from Taxes column using the arrow icon.

The second two columns (Employer Detail) are used only for those deductions/benefits that have Both or Employer specified as the Contributor. If the employee is responsible for paying taxes on a benefit, move the appropriate tax(es) to the Benefit is taxable for column using the arrow icon. If this benefit is not taxable, then all taxes would stay in the Benefit is not taxable for column. To select more than one tax at a time, hold the CTRL key while you make your selections.

17. Click Save to save the deduction/benefit and return to the List tab, or click Close to save the deduction/benefit and close the Deductions & Benefits screen. When this deduction/benefit is saved, it will automatically be added to all employers in the database.

Earnings tab

18. Click the Earnings tab.
19. Determine which earnings this deduction/benefit does/does not apply to.

Step B - Add the Deduction/Benefit to an Employee Record:

Follow the instructions below to add deductions/benefits to individual employee records. If you have a deduction/benefit that should be added to multiple employees, we recommend using the Employee Mass Update (Setup > Payroll Details > Employee Mass Update) option instead. Refer to the Employee Mass Update topic for more information.

1. Select Setup > Employees.
2. Select the employee requiring the deduction/benefit and click Edit.
3. Select the Deductions & Benefits tab.

4. Select the Employer on the left side of the screen.
5. The list of available deductions and benefits will then be displayed at the bottom of the screen. Select the appropriate deductions/benefits. The selected items will then automatically be included in the list of deductions & benefits for this employee at the top of the screen.
6. Select the deduction/benefit under the company. It will have either an Employee line, an Employer line, or both listed below it. Deduction/Benefit Details will need to be assigned for each line displayed. Select the Employee line first.

7. The fields displayed in the Deduction/Benefit Detail are dependent on which options were selected when the deduction/benefit was originally setup (Setup > Payroll Details > Deductions & Benefits). Complete the fields with information specific to this employee.
8. Select the Employer line from the upper left side of the screen (if available) under the deduction/benefit. The fields displayed in the Deduction/Benefit Detail are dependent on which options were selected when the deduction/benefit was originally setup (Setup > Payroll Details > Deductions & Benefits). Complete the fields with information specific to the employer's portion of this benefit.

9. If displayed, specify the Limits.

10. Click Save. Repeat Step B for each employee that needs a deduction/benefit added to their employee record.

11. ployees > Earnings tab. From the upper-left side of the screen, select the earning that was added, and then on the right side of the screen review the details.

Step C - Add a Deduction/Benefit to Multiple Employee Records

1. Select Setup > Payroll Details > Deductions & Benefits.
2. Select the deduction/benefit you want to add to multiple employee records.
3. Right-click and select Add to Employees.

4. Select the employees that this deduction/benefit should be added to and then click the right arrow . To select all employees, click the double-right arrow .
5. Click Add.
6. At the Are you sure you want to add the deduction/benefit to selected employees? message, click Yes.
7. The number of employees the deduction/benefit was added to will display, click OK.
8. To review deduction/benefit details for the employees, select Setup > Employees > Deductions & Benefits tab. From the upper-left side of the screen, select the deduction/benefit that was added, and then on the right side of the screen review the details.

Activate/Deactivate a Deduction/Benefit for an Employer

If a deduction is marked as inactive on an employer, it will not available to assign it to employees. This would normally be done only if you will no longer be adding this deduction to new employees.

1. On the Setup menu, click Employers.
2. Select the employer you want to activate or deactivate a deduction/benefit for, and then click Edit.
3. Click the Deductions & Benefits tab.
4. In the Selected Items Window (upper-left), select Deductions & Benefits.
5. Select the deduction/benefit that you want to activate.
6. Under Deduction/Benefit Detail (right), select or unselect the Active check box (depending on if you want the deduction/benefit active for this employer or not.
7. Click Save to save the employer and return to the List tab, or click Close to save the employer and close the Employers screen.

Activate/Deactivate a Deduction/Benefit for an Employee

If a deduction/benefit is marked inactive on an employee, it will no longer be calculcated when processing payrolls for this employee.

1. On the Setup menu, click Employees.
2. Select the employee you want to activate a deduction/benefit for, and then click Edit.
3. Click the Deductions & Benefits tab.
4. In the Selected Items Window (upper-left), select the Employer this deduction/benefit should be activated for.
5. In the Selected Items Window, select the deduction/benefit you want to activate.
6. Under Deduction/Benefit Detail (right), select or unselect the Active check box.
7. Click Save to save the employee and return to the List tab, or click Close to save the employee and close the Employees screen.

Change an Existing Deduction/Benefit

1. On the Setup menu, point to Payroll Details, and then click Deductions & Benefits.
2. Select the deduction/benefit you want to change, and then click Edit. Note: If you change the information in the Name box, past deduction/benefit information is automatically linked to the new name. For example, if you change the deduction Health Insurance to Health Insurance - Preferred One , your reports will no longer show Health Insurance and any existing information for Health Insurance is now part of Health Insurance - Preferred One..
3. Edit or view the deduction/benefit detail.

4. Click Save to save the deduction/benefit and return to the List tab, or click Close to save the deduction/benefit and close the Deductions & Benefits screen. Note: To return to the List tab without saving the deduction/benefit , click Cancel. To close the Deductions & Benefits screen without saving the deduction/benefit click in the upper-right corner.

Delete a Deduction/Benefit

1. On the Setup menu, point to Payroll Details, and then click Deductions & Benefits.
2. Select the deduction/benefit you want to delete, and then click Delete. Note: You cannot delete a record that is linked to other records in the system. For example, if a deduction or benefit is attached to an employer or employee or the deduction or benefit has been used in a pay run. However, you can deactivate a deduction or benefit on both the employee or employer levels.
3. At the "Are you sure you want the item deleted?" message, click Yes.

Delete a Deduction/Benefit from an Employer

A deduction/benefit can only be removed from an employer if it's not assigned to any employees.

1. On the Setup menu, point to Payroll Details, and then click Employers.
2. Select the employer you want to delete an deduction/benefit from, and then click Edit.
3. Click the Deductions/Benefits tab.
4. In the Selected Items Window (upper-left), select Deductions & Benefits.
5. In the Items Available for Selection Window (lower-left), select the check box next to the deduction/benefit you want to delete to clear the check box.
6. At the "Are you sure you want to delete this item?" message, click Yes.
7. Click Save to save the employee and return to the List tab, or click Close to save the employee and close the Employees screen. Note: To return to the List tab without saving the employee, click Cancel. To close the Employees screen without saving the employee, click in the upper-right corner.

Delete a Deduction/Benefit from an Employee

1. On the Setup menu, click Employees.
2. Select the employee you want to delete a deduction/benefit from, and then click Edit.
3. Click the Deductions & Benefits tab.
4. In the Selected Items Window (upper-left), select the Employer this deduction/benefit is for.
5. In the Items Available for Selection Window (lower-left), select the check box next to the deduction/benefit you want to delete to clear the check box.
6. At the "Are you sure you want to delete this item?" message, click Yes. Note: You cannot delete a record that is linked to other records in the system. For example, if a deduction or benefit is attached to an employee or the deduction or benefit has been used in a pay run. However, you can deactivate a deduction or benefit on both the employee or employer levels. Deductions cannot be deleted until the deduction is first removed from the Deduction Direct Deposit Information grid from the Direct Deposit tab in Setup > Employees.
7. Click Save to save the employee and return to the List tab, or click Close to save the employee and close the Employees screen.

See Also