For examples of how to set up formulas and tables, open the sample com-pany Bellwether Garden Supply. From the File menu, select Payroll Formu-las, then User-Maintained. Select a tax that resembles what you are trying to set up and note the formula and (if applicable) the tax brackets in the exam-ple. These formulas and tables are only examples; you should verify their accu-racy by checking the latest calculation rules from the IRS (www.irs.gov) or your state or local tax agency, or by making sure the values entered match company policies (for examples regarding 401K, vacation, etc.).
Setting up payroll fields and formulas can be one of the more complex fea-tures of Peachtree. You should carefully evaluate this decision, perhaps in consultation with your accountant.
Payroll Setup Wizard
Most basic payroll information and standard payroll fields are set up for you when you fill in the information in the Payroll Setup wizard.
➥From the Maintain menu, select Payroll, and then choose Payroll Setup Wizard.
Once you have completed the wizard, you can still edit payroll information there. But the name of the wizard changes to Payroll Settings Wizard.
If you want more information:
In the Help index, look up “payroll fields.”
Look up “tax table formula.”
Note
ous section, or click on the links on the Payroll Setup Wizard to learn more about these choices.
Company Information
Once you’ve made your choices about how you plan to implement your payroll, you arrive at the Company Information window.
On this screen, you enter basic information about your company. Based on this information, Peachtree will begin setting up payroll fields and formulas.
For example, based on the State you enter, we’ll set up payroll fields for cal-culating your state unemployment and income tax. The rate you enter will be used in the payroll formula for your state unemployment insurance (SUI).
If applicable to your state, other state tax rate fields may display.
Employee Meals and Tips: By default, the Tips and Meals fields are memo fields. Their amounts are logged for reporting and tax calculations, but no entry is posted to the general ledger.
This state will default when you are setting up employees, but you can change it if necessary.
Enter the unemployment percentage the state government requires your company to pay. This is used to create the calculation for SUI (State Unemployment Insurance) employer taxes.
Payroll Setup Wizard
➥ To go on to the next window in the wizard, click the Next button at the bottom of the window.
Pay Types
You can set up a maximum of 20 different pay level types for hourly pay types and 20 for salary types. This means you can track overtime, bonuses, or any other special types of pay.
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Benefits
You can set up many different types of benefits in the Payroll Setup Wizard, including:
If you want more information:
In the Help index, look up “payroll tax tables, overview.”
Look up “payroll tax tables, Peachtree-maintained.”
Look up “payroll tax tables, user-maintained.”
The accounts you
❖ employee insurance, including medical, dental, vision, and long- and short-term disability insurance
❖ retirement plans, including SIMPLE, 401(k), IRA, Roth 401(k) and IRA, and 403(b)
❖ flexible spending accounts, including Medical Care, Dependent Care, Health Savings Accounts, and Adoption Assistance
For each benefit, the wizard walks you through the process of setting up the standard parameters for the benefit for your company. Your answers help Peachtree create both the payroll fields (including company and employee contributions) and payroll formulas.
Payroll Setup Wizard Vacation and Sick-Time Tracking
Vacation and sick time for employees can be set up two ways:
❖ Employees earn all their hours at one time (for example, at the beginning of the year).
❖ Employees earn a specified number of hours each payroll period that accrues throughout the year.
When employees go on vacation or are sick, the used hours are recorded on their paychecks and are subtracted from their total hours allowed or earned.
The remaining hours are tracked throughout the payroll year.
If you want more information:
Look up “vacation time, tracking setup.”
Look up “sick time, tracking setup.”
You can use a custom payroll formula to track the total and remaining hours of vacation, or just answer the questions and let Peachtree create formulas for you.
Here, you’re setting up the standard or most common vacation rules.
You can tweak this information for individual employees, on the Vacation/Sick Time tab of Maintain Employees.
Insurance Plans: Medical
All insurance plans are set up similarly. We’ll look at an example of setting up a typical medical plan.
First, you answer the questions about who contributes to the plan. If both the company and employee contribute, Peachtree will set up a payroll field for each.
Some insurance plans must be given a name; this name is used on employee screens and on reports. It must start with a letter, have at least 2 characters, and cannot have spaces or special characters like asterisks.
Next, you can change whether contributions are taxable or not for this plan.
Peachtree selects the taxes that are usually affected for the benefit. Normally you would not need to change these settings. However, for local or other special, non-supported taxes, you may need to change them. You should check with your taxing authority.
Contributions can be based on a specific amount or on a custom (user-maintained) formula you create to calculate the amount.
Payroll Setup Wizard Retirement Plans: 401(k)
While all retirement plans are set up similarly in the Payroll Setup Wizard, we’ll look specifically at setting up a 401(k) plan.
401(k) contributions are generally pretax deductions in which a specified percentage of the employee’s gross wages is taken out prior to taxes and placed into a savings plan set up by the company. The contributions and the savings plan proceeds are tax deferred by the US government. In many com-panies, employers match the employee contributions.
First, you must decide what type of company 401(k) plan you want to set up and what general ledger accounts are to be used when recording contribu-tions.
If your company contributes to the plan, you can enter a percentage or dol-lar amount for that contribution. Enter each percentage as a positive num-ber. (Enter 4.0—not 0.04—for 4%.) You can also use a custom formula to calculate the contribution, or use an advanced formula.
In the example shown above, the company is matching 100% (dollar for dollar) of all employee 401(k) contributions up to 4%. If an employee
con-The liability account is usually a 401(k) deductions payable account.
The expense account is usually a benefit, pension, or profit-sharing plan expense account.
General Ledger Accounts
You can change the general ledger account that tracks employee contribu-tions for each deduction you set up. This is usually a liability account
—
a payable to the benefit provider. You can even add a new account that is spe-cific to a deduction; it just depends on the level of detail you need in reports.Setting Up Taxes
Here, you set the default or standard general ledger accounts for most pay-roll tax liabilities and expenses. You can also set up any applicable local taxes that you or your employees are responsible for.
Local Taxes: Select Yes if you or your employees are responsible for local taxes. Then you'll be able to set up a Locality and Rate for these local taxes.
(This field only displays if your company's state has supported local taxes.) You don't need to set up
Employee GL accounts if the deduction is paid for by the company. The employee contributions screen can be blank if there is no employee-paid por-tion of the tax or benefit.
These are the most common accounts for taxes; you can adjust them for individual employees, or when processing paychecks.
Payroll Setup Wizard Assign Tax Fields
When you walk through the Payroll Setup Wizard for the first time, you don’t see the Assign Tax Fields window. You can only access these windows after you have completed the wizard. That’s because Peachtree will correctly assign the tax fields that are set up within the Payroll Setup Wizard.
You would only have to assign tax fields if you a) create a payroll tax outside of the Payroll Settings wizard, such as a labor tax or union dues; or b) move your business from one state to another.
We provide two State Special fields for unique state taxes you might have to add outside the Payroll Settings wizard.
You would have to assign any tax fields like that, in order for them to display on your tax forms (W-2s, 940s, etc.) and certain payroll reports.
Setup Complete
Once you click the Finish button on the Setup Complete page, then most of your payroll fields and formulas will be created for you. You will still have some setup work to do, though.
Employees You still need to set up information about your employees, including their contact information, with-holding, and pay rate. If you set up benefits in the wizard, you may need to enter the percentages or amounts each employee pays. This is usually done on the Withholding Info tab of the Maintain Employ-ees window.
Other Taxes Some local taxes may not be supported by Peachtree. You would have to set these up in Employee Defaults. If there is a calculation required for these taxes, you would set this up in User-Main-tained Payroll Formulas.
Payroll Formulas If you elected not to subscribe to either of the Peachtree tax update services, you will need to create payroll formulas for your taxes and deduc-tions. You should review documents from the IRS and your state and local taxing authorities for the latest information on tax rates and limits.
Payroll Setup Wizard What Specific Payroll Fields Are Set Up Initially?
As you step through the Payroll Setup wizard, Peachtree can set up (depend-ing on your responses) the fields in the tables below. These fields will show up on your paychecks, so it’s important to know what they are for.
Naming Conventions
State and local tax table names are set up with wildcard characters. This means that asterisks (**) represent the state code, so that whatever state an employee must report taxes to is read into the payroll field calculation. You enter this state code in the State/Locality column of the Withholding Infor-mation table on the Maintain Employees/Sales Reps window. These are the fields Peachtree reads when computing state and local taxes, and they allow for a situation where employees work in a different state or local region from the default location.
Employer payroll fields and formulas have an C appended to them to desig-nate company-paid taxes. (If you set up payroll in a previous release of Peachtree, prior to version 2009, these fields will have an ER instead of a C appended.)
Peachtree sets up employee-paid state disability insurance, state unemploy-ment tax, and state training tax payroll fields if your state requires them.
If you want more information:
In the Help index, look up “Payroll Setup Wizard.”
Look up “payroll fields, setting up.”
How Default Information is Used up mostly in the Payroll Setup Wizard) help you enter employee information. They also define: how paychecks are calculated, vacation and sick time policy, and what displays on reports