Sage HRMS U.S. Payroll 2014 year-end guide December 2014
This is a publication of Sage Software, Inc. Document version: December 18, 2014 Copyright © 2014. Sage Software, Inc. All rights reserved. Sage, the Sage logos, and the Sage product and service names mentioned herein are registered trademarks or trademarks of Sage Software, Inc. or its affiliated entities. All other trademarks are the property of their respective owners. Your use of this document and the Sage product(s) described herein is governed by the terms and conditions of the Sage End User License Agreement ("EULA") or other agreement that is provided with or included in the Sage product. Nothing in this document supplements, modifies or amends those terms and conditions. Except as expressly stated in those terms and conditions, the information in this document is provided by Sage "AS IS" and Sage disclaims all express, implied or statutory warranties of any kind, including but not limited to the warranties of merchantability, fitness for a particular purpose or of non-infringement. No implied license is granted to you under any Sage intellectual property or trade secret right. Sage reserves the right to revise, supplement, or remove information in this document at any time without notice to you or others. Sage End User License: http://na.sage.com/sage-na/eula
Contents Get help with year-end 2014 ............................................................................................................... 5 Sage Payroll Tax Forms and eFiling by Aatrix ....................................................................................... 5 Validate year-end data ........................................................................................................................ 5 Compare Earnings and Hours to Tax Calculation Analysis............................................................... 5 Make adjustments using Transaction History.................................................................................. 6 Review taxes and employee information ........................................................................................ 6 Additional filing information................................................................................................................ 7 To file Federal forms 940, 943, 944, and 945 .................................................................................. 7 To file supported state forms .......................................................................................................... 7 The Affordable Care Act on Sage City.................................................................................................. 7 Employer cost of healthcare reporting............................................................................................ 8 Create the employer deduction................................................................................................... 8 Collect healthcare amounts to report ......................................................................................... 8 Before processing payroll for 2015 ..................................................................................................... 9
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Get help with year-end 2014
Sage strives to provide you with the very best support in the industry. If you have a question, we’re here to help! 1.
Help and documentation: Many answers to common questions can be found in the help and documentation included with Sage HRMS.
2.
Attend a training course on Sage University to learn the ins and outs of year-end processing with Sage HRMS. To view online and classroom training options, visit http://sageu.com/, click the Visit Sage University button, then log on, create an account, or browse as a guest.
3.
Sage City Year-End Center: Visit http://sagecity.na.sage.com/yearend/ for help, guidance, documents, and downloads specific to Sage HRMS Payroll and Year-end 2014.
4.
Customer Support: For additional articles and resources, visit http://support.na.sage.com or contact Customer Support at 800-829-0170. Please have your Customer ID handy when contacting Support.
5.
Tax forms: Because all printed forms have variations, Sage HRMS Payroll only supports forms printed by Sage Checks and Forms. Call Sage Checks and Forms at 800-617-3224 or order online at www.SageChecks.com.
Sage Payroll Tax Forms and eFiling by Aatrix Sage Payroll Tax Forms and eFiling by Aatrix is a feature included with Sage HRMS. With this functionality you can complete and file tax forms electronically: including W-2s, W-3s, federal forms (940, 943, 944, and 945), state tax forms, and new hire reporting by state. To learn more about Sage Payroll Tax Forms and eFiling by Aatrix, view the Sage HRMS in-product Help or visit http://partner.aatrix.com/index.php/sagehrms. For information about Year-End with Sage Payroll Tax Forms and eFiling by Aatrix, see the Sage HRMS Payroll Release Notes for Q4, 2014 available on the Sage Knowledgebase at https://support.na.sage.com.
Validate year-end data With Sage HRMS, year end is a simple process but it requires a little effort to validate the amounts reported. Verify the year-to-date values are correct for gross wages, earnings subject to tax, earnings subject to tax (no ceiling), employer expense, and employee withholding. Two reports you can use to validate this information are Earnings and Hours (select Reports > Payroll > Transaction Reports), and Tax Calculation Analysis (select Reports > Payroll > Transaction Reports).
Compare Earnings and Hours to Tax Calculation Analysis Using the Earnings and Hours and Tax Calculation Analysis reports, select the Report Type Calendar Year Totals to retrieve YTD information. Use the Report Summary pages and Year To Date columns in the reports to balance the following taxes: Sage HRMS US Payroll 2014 Year-End Guide - 5
Tax code
Report: Tax Calculation Analysis Report Style: Calendar Year Totals
Report: Earnings and Hours Report Type: Calendar Year Totals
Comment
USFIT
Earnings Subject to Tax (no ceiling)
Calculate the wagebase by subtracting base deductions from base earnings.
Employee Withholding
Confirm amounts for each employee USFIT.
If the base earnings or base taxes were changed because they were set up incorrectly, the earnings subject to tax will be incorrect. Adjustments can be made on the employee’s Transaction History Detail.
USSS
Earnings Subject to Tax
Employee Withholding
Earnings subject to tax should not exceed the Federal limit for each employee. Confirm amounts for each employee USSS.
Employer Expense
USMED
Employee withholding must not exceed the annual maximum amount. Employer expense must not exceed the Federal limit per employee.
Earnings Subject to Tax (no ceiling)
Calculate by subtracting base deductions from base earnings.
Employee Withholding
Confirm amounts for each employee USMED.
Employee withholding and employer expense amounts should match.
Employer Expense
USFUTA
Earnings Subject to Tax Earnings Subject to Tax (no ceiling)
SUTA Wages
Calculate by subtracting base deductions from base earnings.
Verify the limit has not been exceeded for each employee.
Employer Expense
Multiply earnings subject to tax by the employer rate to verify the amount.
Earnings Subject to Tax
Verify the limit has not been exceeded for each employee.
Earnings Subject to Tax (no ceiling)
Calculate by subtracting base deductions from base earnings.
Employer Expense
Multiply earnings subject to tax by the employer rate to verify the amount.
Section 125
Verify the Year To Date amounts listed.
Add section 125 deductions.
Other Deferred
Verify the Year To Date amounts listed.
Add other deferred deductions.
Make adjustments using Transaction History If necessary, you can make adjustments on the employee’s Transaction History detail page (Payroll > Tasks > Transaction History). Transaction History details automatically appear on the Form W-2s if the earning, deduction, or tax code is linked at the rule level (Setup > Payroll > select Earning/Deduction Codes or Local/Other Tax Codes > Employee tab > W2 Reporting field). Pre-defined taxes automatically appear on the Form W-2.
Review taxes and employee information 1.
Review your tax codes (Setup > Payroll > Federal/State Tax Codes and > Local/Other Tax Codes) to make sure the Reporting IDs and W-2 reporting boxes are correctly listed. Sage HRMS US Payroll 2014 Year-End Guide - 6
2.
Update employee information such as: •
Address on the Demographics detail page (select Employees > View/Edit Employee > Personal tab > Demographics) or Termination detail page (select Employees > View/Edit Employee > Personal tab > Termination).
•
Social Security Number (SSN) on the Demographics detail page (select Employees > View/Edit Employee > Personal tab > Demographics and then select the Personal tab).
•
Pension Plan indicator and Third Party Sick Pay indicator on the Taxes page (select Employees > View/Edit Employee > Payroll tab > Employee Payroll > Taxes tab, select the tax, and click Tax Info…).
3.
Print Forms W-2 (select Reports > Payroll > Government Reports > W-2s on Paper). Totals are provided at the end of the report. There should not be negative amounts for employees. Note: After you click the Print button on a tax form or file window in Sage HRMS, the system processes the employees, creates a file, and the Sage Payroll Tax Forms and eFiling by Aatrix window displays. If your forms are not current, you will be prompted to update them.
Additional filing information To file Federal forms 940, 943, 944, and 945 1.
Select Reports > Payroll > Government Reports > Federal Tax Filing.
2. Select the form you want to file. 3. Click Display to start the process. The Sage Payroll Tax Forms and eFiling by Aatrix window opens and steps you through the process of validating the information, and creating and filing the form.
To file supported state forms 1.
Select Reports > Government Reports > State Tax Filing.
2. Select the state for which you want to file. The supported forms for that state will appear. 3. Select the form you want and click Display. The Sage Payroll Tax Forms and eFiling by Aatrix window opens and steps you through the process of validating the information, and creating and filing the form.
The Affordable Care Act on Sage City Staying on top of the Affordable Care Act is critical—and challenging—particularly when it comes to your obligations under the law. With all the delays, legislative changes, and shifting regulatory interpretations over the past few years, you may be feeling a little overwhelmed Sage HRMS US Payroll 2014 Year-End Guide - 7
now that 2015 is here. To assist you, we’ve set up an Affordable Care Act center on Sage City that includes many assets you may find useful in navigating the changes (please note, some assets require an active Sage Business Care plan to access). Visit http://SageCity.na.Sage.com/ACA for more information.
Employer cost of healthcare reporting The Affordable Care Act requires W-2 reporting of the cost for employer-provided healthcare coverage. The value to report is the COBRA basis for only medical, vision, and dental insurance plans. This amount is equal to the entire employee and employer insurance premium, plus any administrative fees included in the COBRA basis. If you haven’t already set up the Code DD employee and employer deductions, follow these instructions to comply with the federal requirements. Create the employee deduction 1.
Select Setup > Payroll > Earning/Deduction Codes.
2. Add a new code with Category set to Deduction. You can use the code EEDD and the description “EE portion of DD”, for example. 3. On the Basic Info tab, for Employee Calc. Method select Flat and for Employer Calc. Method select None. 4. On the Employee tab, in the W2 Reporting field, select Employer Provided Health Care. 5. Complete all other required fields before saving. Create the employer deduction When you have employee and employer contributions, as long as you select the Employer Provided Health Care W-2 reporting option, the amounts are combined in box 12 for Code DD on the W-2. 1. Select Setup > Payroll > Earning/Deduction Codes. 2. Add a new code with Category set to Benefit. You can use the code ERDD and the description “ER portion of DD”, for example. 3. On the Basic Info tab, for the benefit Type, select Noncash. 4. To expense the employer contribution to a general ledger account, select the Post Benefit to General Ledger check box. 5. On the Employee tab, in the W2 Reporting field, select Employer Provided Health Care. Collect healthcare amounts to report If your company offers medical benefits, you can link the employee and employer deductions set up for reporting purposes to the benefit in HR. 1. Select Setup > Payroll > Employee Configuration. Sage HRMS US Payroll 2014 Year-End Guide - 8
2. Select a Profile ID, then select the Deductions/Benefit tab. 3. Under the Calculation Type column, for your employee-only deduction (EEDD), doubleclick and change it to Employee Only. Change the employer-only benefit (ERDD) Calculation Type to Employer Only. Alternatively, you can enter the amounts on the employee record instead of linking it to an active benefit. 1. Select Employees > View/Edit Employee > select an employee > Payroll tab > Employee Payroll. 2.
Select the Pay tab for the employee.
3.
Enter the amounts to report on the W-2 in the Employee Rate/Amt/Pct and Employer Amt/Pct fields next to the appropriate deduction and benefit.
Before processing payroll for 2015 1.
Install the tax updates, read the accompanying release notes, and review the rates and the wage cap for all custom tax codes.
2.
For caps that have changed at the employee level, use the Update Earnings/Deductions task to update or reset the annual and lifetime maximums.
3.
Make sure earnings and deductions that reached their maximum last year are set to calculate Yes on Employee Payroll detail page.
4.
Update 2015 tax information (for example, W-4 information) for employees.
5.
Review accrual balances. You can use the Accruals report (Reports > Payroll > Transaction Reports) to validate each employee’s accruals as they were earned and taken by date.
6.
Define the next fiscal year if you haven’t already (select Setup > Payroll > Fiscal Year Calendar).
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