How to set up Benefit-Payroll Link?
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Benefits-Payroll Link
The Benefits-payroll link is normally configured during the project phase with HRplus and with the assistance of an Implementation Specialist.
Via this option;
- A benefit plan/plan type can be linked with a deduction code for a particular pay group. Instead of entering a cycle change record for each employee, the deduction will be processed for all employees in the pay group when the payroll is run. The employees must be registered for the plan/plan type for the deductions to be made.
- A deduction can be automatically set up for employees registered in benefit plans. The system will use the data set up here to automatically generate a deduction for the specified benefit plan/plan type in the correct cycle.
How does it work?
The system will check to determine if the employee is registered in a benefit plan and will use the Effective Date to determine the pay cycle. The Terminated Date will be used to stop processing the deduction.
Employees must be on the plan for the deductions to be made via the link. Further, the Effective Date must be on or before the pay period end date (Payroll>>Pay Cycles) and the Termination Date, if any, must be on or after the pay period start date (Payroll>>Pay Cycles).
The rule can be overridden by entering a cycle change for the deduction code in the link. For employees not on the plan, cycle changes have to be entered every cycle for the deduction to be processed whether the deduction is flagged as regular or not.
If a benefit–payroll link is removed the deduction code is automatically flagged as not regular. Once a Benefit Payroll Link is created the deductions will be made whether the deduction is flagged as regular (or not for employees in the plan within valid effective and termination dates.
The setup is done by Pay Group and Deduction Codes for each Benefit Type must already be set up (Maintenance>> Payroll Setup>> Deductions).
Paygroup Setup for Benefit Plan Type
- Pay Group: Select the pay group from the drop-down list
- Benefit Plan: Once your Benefit Plans have been setup, you can select the benefit plan from the drop-down list.
- Benefit Type: Once your have selected your Benefit Plan and you have made the Benefit Plan Type and Company Benefit Plan linkages, the Benefit types options will be available base on what was setup for the benefit plan. Select the type from the drop-down list.
- Deduction Code: Select the deduction code from the list of deductions already set up. The benefit will be deducted under this code in the payroll.
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Employer Override Code: This is a user defined deduction code that has to be created in the deduction types in the Payroll module. It can be used to override the Employer Contributions for selected employees via a Cycle Changes entered in the appropriate cycle.g. PENOVER (Pension Override).
- This code should also be entered in the Business Rule Employee Override window:
- Go to Payroll >. Business Rules >> Pay Options >> Employee Business Rule Override.
- Enter the Business rule code and description.
- Click on the + sign to expand the record and select the employee to whom the override applies.
- This code should also be entered in the Business Rule Employee Override window:
Employee Contribution
EMPLOYEE
Employee % or $:
- % for Pay Group: Select if ALL employees in the pay group/plan contribute the same percentage.
- Amount for Pay Group: Select if ALL employees in the pay group/plan have the same contribution.
- % In Benefits: Select if employees in the pay group/plan have do not have the same percentage contributions. If this option is selected, the system will use the figures in Employee and Employer Contribution fields in the Enrolled Employee window of the Benefits Module (Benefits >> Benefit Plan Type>> Enrolled Employee >> Expand record to see individual employee contributions.)
- Amount in Benefits: Select if employees in the pay group/plan do not contribute the same cash amount. If this option is selected, the system will use the figures in Employee and Employer Contribution fields in the Enrolled Employee window of the Benefits Module. (Benefits >> Benefit Plan Type>> Enrolled Employee >> Expand record to see individual employee contributions.)
If you select either % for Pay Group or Amount for Pay Group ( 1 or 2 above) then enter a value in the Employee Contribution field. The value will be interpreted as an amount or percent depending on the value in the Employee % or $ field.
If you select either % in Benefits or Amount in Benefits (3 or 4 above) then do not enter a value in the Employee contribution field. Instead, the system will use the values entered when you enroll the employees into Benefit Type Plans via (Benefits>> Benefit Setup>> Benefit Plan Type). The value will be interpreted as an amount or percent depending on the value in the Employee % or $ field.
If the value of Employee % or $ is either an Amount for Pay group or Amount in Benefits ( 2 or 4 above), then select NOT USED in the Employee Calc On field.
If the value of Employee % or $ is either % for Pay Group or % in Benefits ( 1 or 3 above), then identify what the value is to be calculated on by making a selection from the above options in the Employee Calc On field.
If Other is selected, then identify the payroll codes on the values calculated via the Benefit Link Other Setup . Select the pay group, benefit plan, plan type, deduction for which the link is to be created. Then select the code type ( Timesheet, Allowances, Deductions, Other Income, Pay profile) and the particular code associated with your selection. A calculation for the benefit can be derived using the Multiple of Others feature. The default is 1.0.
Employee Calc On
EMPLOYEE
Employee Calc On:
Select from the following options which will indicate the earnings on which the employee benefit contributions are to be calculated when the payroll is run:
Basic + Straight: This selection will allow for the employee benefit deduction to be calculated ONLY on employee earnings flagged as Basic OR Straight in the Earnings Type setup. Earnings so flagged will be summed and the percentage calculated on the total.
Basic Only: Calculations and deductions will be based on ONLY the employee’s pay flagged as Basic in the Earning Type setup screen.
Straight Only: Calculations and deductions will be based on ONLY the employee’s pay flagged as Straight in the Earning Type setup screen.
All Timesheet Earnings: Calculations and deductions will be based on ALL the employee’s time sheet earnings
Total Gross: Calculations and deductions will be based on the employee’s TOTAL gross pay.
Gross Taxable: Calculations and deductions will be based on the employee’s total gross pay AFTER tax.
Quoted Pay Rate: Calculations and deductions will be based on employee’s pay rate as defined in the Cycle Rate $ field in the Employee Pay Profile window (POWERpay>>Employees>> Pay Profile).
Other: If the deduction is to be calculated on any other income type that is not included in this list, select this option. Then, use the Benefit Links Other Setup to define the income that the benefit calculation is to be based (illustrated in the Benefits Links Other Setup section of this manual).
Not Used: Select this option if the Employee % or $ is either Amount for Pay Group or Amount in Benefits as no calculation is required to determine the employee’s benefit deduction.
Employee Calc On Factor:
In this field, enter a factor (number) by which the value in Employee Calc on is to be multiplied according to the rules of your Benefit Plan. If there is no factor, then you can simply enter ‘1’.
Employee Round Rules: Selections include Do Not Round, To the next, To the Lower or To the Nearest. Use this to indicate to the application, the manner in which the product of the Employee Calc On x the Employee Calc On Factor is to be rounded. If it is to be rounded, in the Employee Round to Nearest field, enter the dollar amount by which the product should be rounded.
The default option is set to round to 0.01. Rounding to the nearest 0.01 means you basically round down if the thousandth place (3rd digit right of the decimal) is less than 5 and if it's 5 and up, then round up. So 0.163 rounds down to 0.16 since the hundredth is 3, and 0.1432 rounds down to 0.14 as well. If it was 0.1482, for example, you'd round up to 0.15.
Employer Contribution
EMPLOYER
Employer % or $:
- % for Pay Group: Select if the employer contribution for ALL employees in the pay group is the same percentage.
- Amount for Pay Group: Select if the employer contribution for ALL employees in the pay group is the same amount.
- % In Benefits: Select if the employer contributions for ALL employees in the pay group is NOT the same. If this option is selected, the system will use the figures in Employee and Employer Contribution fields in the Enrolled Employee window of the Benefits Module (Benefits >> Benefit Plan Type>> Enrolled Employee >> Expand record to see individual employee contributions.)
- Amount in Benefits: Select if the employer contribution for ALL employees in the pay group is NOT the same cash amount. If this option is selected, the system will use the figures in Employee and Employer Contribution fields in the Enrolled Employee window of the Benefits Module. (Benefits >> Benefit Plan Type>> Enrolled Employee >> Expand record to see individual employee contributions.)
If you select either % for Pay Group or Amount for Pay Group ( 1 or 2 above) then enter a value in the Employer Contribution field. The value will be interpreted as an amount or percent depending on the value in the Employer % or $ field.
If you select either % in Benefits or Amount in Benefits (3 or 4 above) then do not enter a value in the Employer contribution field. Instead, the system will use the values entered when you enroll the employees into Benefit Type Plans via (Benefits>> Benefit Setup>> Benefit Plan Type). The value will be interpreted as an amount or percent depending on the value in the Employer % or $ field.
If the value of Employer % or $ is either an Amount for Pay group or Amount in Benefits ( 2 or 4 above), then select NOT USED in the Employer Calc On field.
If the value of Employer % or $ is either % for Pay Group or % in Benefits ( 1 or 3 above), then identify what the value is to be calculated on by making a selection from the above options in the Employer Calc On field.
If Other is selected, then identify the payroll codes on the values calculated via the Benefit Link Other Setup . Select the pay group, benefit plan, plan type, deduction for which the link is to be created. Then select the code type ( Timesheet, Allowances, Deductions, Other Income, Pay profile) and the particular code associated with your selection. A calculation for the benefit can be derived using the Multiple of Others feature. The default is 1.0.
Employer Calc On
Employer Calc On:
Select from the following options which will indicate the earnings on which the employee benefit contributions are to be calculated when the payroll is run:
Basic + Straight: This selection will allow for the employee benefit deduction to be calculated ONLY on employee earnings flagged as Basic OR Straight in the Earnings Type setup. Earnings so flagged will be summed and the percentage calculated on the total.
Basic Only: Calculations and deductions will be based on ONLY the employee’s pay flagged as Basic in the Earning Type setup screen.
Straight Only: Calculations and deductions will be based on ONLY the employee’s pay flagged as Straight in the Earning Type setup screen.
All Time sheet Earnings: Calculations and deductions will be based on ALL the employee’s time sheet earnings
Total Gross: Calculations and deductions will be based on the employee’s TOTAL gross pay.
Gross Taxable: Calculations and deductions will be based on the employee’s total gross pay AFTER tax.
Quoted Pay Rate: Calculations and deductions will be based on employee’s pay rate as defined in the Cycle Rate $ field in the Employee Pay Profile window (Payroll>>Employees>> Pay Profile).
Employer Amount x (Employee-Employer) Factor: The employer’s contributions can also be calculated on a factor based on the employees’ contributions.
Other: If the deduction is to be calculated on any other income type that is not included in this list, select this option. Then, use the Benefit Links Other Setup to define the income that the benefit calculation is to be based (illustrated in the Benefits Links Other Setup section of this manual).
Not Used: Select this option if the Employee % or $ is either Amount for Pay Group or Amount in Benefits as no calculation is required to determine the employee’s benefit deduction.
Employer Calc On Factor:
In this field, enter a factor (number) by which the value in Employer Calc on is to be multiplied according to the rules of your Benefit Plan. If there is no factor, then you can simply enter ‘1’.
Employer Round Rules: Selections include Do Not Round, To the next, To the Lower or To the Nearest. Use this to indicate to the application, the manner in which the product of the Employee Calc On x the Employee Calc On Factor is to be rounded. If it is to be rounded, in the Employer Round to Nearest field, enter the dollar amount by which the product should be rounded.
Employee Employer Factor: If the highlighted option above is selected for the EMPLOYER deduction, then enter a value in this field. The value of the Employee deduction will be multiplied by this factor entered here to determine the value of the Employer deduction.
Run In: This field indicates whether the deductions for the plans are to be made in:
Normal: The default is set for the deductions to run in Normal pay cycles. This can be changed to any of the other options including Out of Cycle, Normal and OOC, No Cycle. If no cycle is selected, then the benefit deduction will not run in the payroll until this has been changed.
Start in Cycle: This indicates to the application the cycle in which the benefit contribution calculations and deductions are to begin. E.g. 2. If 2 is entered here, then the deductions are to begin in cycle 2.
Number of Cycles to Skip: This indicates to the application if the calculations and deductions of the benefit contributions are to skip any cycles.
The two fields Start In Cycle and Num Cycles To Skip work together to control the PAYCYCLES in which the deductions are made.
Examples follow:
Start In Cycle: Contains a pay cycle and is a positive integer.
Num Cycles To Skip: Contains a positive integer.
- If the value in the Starting Pay Cycle field is 1 and the value in the Num Cycles To Skip is 1, then the link is applied in cycle 1 initially and then in pay cycle 2,3, 4, ... (the link is applied in every pay cycle).
- If the value in the Starting Pay Cycle field is 2 and the value in the Num Cycles To Skip is 2, then the link is applied in cycle 2 initially and then in pay cycle 4,6, 8, ... (the link is applied in even pay cycles.)
- If the value in the Starting Pay Cycle field is 3 and the value in the Num Cycles To Skip is 4, then the link is applied in cycle 3 initially and then in pay cycle 7,11, 15.
The general formula for determining how the set up is applied in a pay cycle is: Modulus (a – b, c) = 0, where a is the pay cycle that is being run, b is the value in the field Starting Cycle, and c is the value in the field Num Cycle To Skip. This means that if the remainder when (a-b) is divided by c is equal to zero, the link is applied.
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