CSS ORMED. USER GUIDE USA Payroll Year-End Procedures. Human Capital Management Suite. Ormed Information Systems Ltd. Version 3.

Transcription

1 CSS ORMED USER GUIDE USA Payroll Year-End Procedures Human Capital Management Suite Ormed Information Systems Ltd. Version 3.0 (December 2014)

2 What s Inside WHAT S INSIDE... 1 OVERVIEW... 2 Phase 1 Year-End Preparation... 2 Phase 2 Year-End Close... 2 Phase 3 Prepare Employee W-2 Slips... 2 PHASE 1 YEAR-END PREPARATION (PERFORMED IMMEDIATELY)... 3 STEP 1: ENSURE YOUR ACCUMULATOR CODES ARE SET TO RESET PROPERLY AT YEAR-END STEP 2: REVIEW EMPLOYEE YEAR-TO-DATE BALANCES AND ADJUST IF NECESSARY STEP 3: CREATE YOUR NEW PAY PERIOD SCHEDULE STEP 4: ENTER THE STATUTORY HOLIDAYS FOR THE UPCOMING YEAR STEP 5: VERIFY THAT THE EIN NUMBERS, STATE ID AND UI ACCOUNT NUMBERS HAVE BEEN CORRECTLY ENTERED FOR EACH COMPANY CODE STEP 6: MODIFY FEDERAL TAX FORMULAS TO REFLECT RATE CHANGES (IF ANY) STEP 7: MODIFY STATE TAX FORMULAS TO REFLECT RATE CHANGES (IF ANY) Florida, Texas:... 7 Kentucky:... 7 Lousiana:... 8 Minnesota:... 8 Wisconsin: STEP 8: MODIFY LOCAL, SCHOOL DISTRICT, CITY, COUNTY TAX FORMULAS TO REFLECT RATE CHANGES (IF ANY) STEP 9: UPDATE THE SOCIAL SECURITY WAGE FORMULA TO REFLECT THE NEW MAXIMUM TAXABLE EARNINGS STEP 10: ADJUST YOUR OTHER FORMULAS TO REFLECT RATE CHANGES FOR THE UPCOMING PAYROLL YEAR STEP 11: REVIEW EMPLOYEE SETUP AND MODIFY ANY BENEFIT ENROLMENTS OR TAX ELECTIONS THAT HAVE CHANGED PHASE 2 YEAR-END CLOSE STEP 1: MAKE A BACKUP OF YOUR PAYROLL SYSTEM STEP 2: CLOSE PAYROLL FOR THE YEAR PHASE 3 PREPARE EMPLOYEE W-2 SLIPS CONTACT US QUESTIONS AND SUPPORT WHAT ARE YOUR THOUGHTS? Ormed Information Systems Ltd. Page 1 of 14

3 Overview There are three phases to the payroll year-end process in the CSS ORMED Payroll processing system: Phase 1 Year-End Preparation Update your benefit, deduction, and tax formulas in preparation for the upcoming payroll year. Ensure your accumulator codes are set to reset properly at year-end, and upgrade to the latest version of CSS ORMED software. These steps should be performed in December as soon as the required information is available. Phase 2 Year-End Close Close the payroll for the newly completed payroll year, reset accumulator balances, and prepare for processing the first payroll of the upcoming payroll year. Perform these steps after the last payroll batch of the newly completed year is posted and prior to beginning the first payroll batch of the new payroll year. Note: If you are planning to run any adjustment or exception batches to correct figures for W-2s, this must be done PRIOR TO Year End Close. Year-end close occurs sometime between the middle of December and the middle of January, depending on the date your employees are paid. If the pay date (the date the employees receive their checks/deposits) is in January, the pay period is considered part of the next tax year even if the pay-end date (the last day of the pay period) is actually in the prior year. Phase 3 Prepare Employee W-2 Slips This phase is performed during the first two months of the new year. The deadline for submitting W-2 summaries to the Internal Revenue Service (IRS) is February 28 each year. The function of preparing employee W-2 slips is performed in the CSS ORMED Statutory Reports module. Step-by-step instructions for preparing employee W-2 slips and electronic downloads are contained in separate help documents which will be available on our FTP site at or ftp://ftp@ormed.com in early January. The files will be located under Downloads >> HRMS >> Year_End_USA. The document is named: CSSORMED_2014_W2 User Guide.pdf Ormed Information Systems Ltd. Page 2 of 14

4 Phase 1 Year-End Preparation (Performed Immediately) Step 1: Ensure your accumulator codes are set to reset properly at year-end. The accumulator codes that have their year-to-date balances reset at payroll year-end are configured in CSS ORMED Payroll Manager in the Accumulator window (found on the Payroll Codes tab). Accumulators with Zero on Dec. 31 marked will have their YTD balances reset to zero when year-end close is performed. Take a moment to review the Zero on Dec. 31 field on each accumulator to ensure that all accumulators that should be reset at year-end have been selected. Since the balances for hours, earnings, benefits and deductions are typically reset at payroll year-end, the majority of accumulators should have Zero on Dec. 31 checked. However, please pay careful attention to BANK or ACCRUAL type accumulators. These types of accumulators include vacation banks, sick banks, overtime banks, seniority counters and accounts receivable balances. Accumulators containing bank balances normally should NOT be reset at year-end. If you are unsure as to whether a particular accumulator should be reset at year-end, please contact CSS ORMED Support Services for guidance. A good way to review your accumulator resets is to use a simple Crystal Report that lists accumulator codes, descriptions, type, and the year-end reset fields. Sort this report in different ways to ensure nothing has been overlooked. The FTP site contains a template that can be used for this purpose. Go to FTP.ormed.com and locate the Downloads\HRMS\Crystal Library\Payroll Manager folder. It contains a report named Zero Out on Dec31v85.rpt. which shows the settings for each accumulator. Alternatively, you can easily build your own report using the PAYACMCD table. We recommend including the following fields in the report: ACCUMCD, ACCUMDESC, ACCUMTYPE, T4BOX (which lists the W-2 box that an accumulator will map to), W_2_BOX12_CD, FISC_RESET. The FISC_RESET will have a 1 or a 0 to indicate yes clear on Dec 31 or doesn t clear. Note: When you close the payroll for the year, a year-end batch will be created, zeroing out any accumulators that are set to Zero at Dec. 31. If you intend to run any payroll adjustment or reversal batches, this should be completed BEFORE closing the payroll for the year. Ormed Information Systems Ltd. Page 3 of 14

5 Step 2: Review employee year-to-date balances and adjust if necessary. Adjust employee year-to-date balances using appropriate entries on the employee s final timesheet for the year. For example, if items were paid through Accounts Payable that need to be reported on W-2s, then the values must be entered manually. Adjustments to W-2 values can also be made before finalizing your W-2 slips in the Statutory Reports module. However, adjustments made through the regular payroll processing function are easier to audit as they have corresponding timesheets and historical payroll registers. One of the easiest ways to review final balances is to use a report template built from the ov_hrms_max_hist_ytd_value view, which shows the most current year to date value for any given accumulator for each employee. Step 3: Create your new pay period schedule. If you are integrated with the CSS ORMED General Ledger module, ask your finance department to create the new Fiscal Period table for the upcoming fiscal year before creating your pay period schedule for the new payroll year. This ensures that the system can map each payroll period to the appropriate fiscal period(s) in the general ledger when the pay period schedule is created. If Finance cannot update your GL Fiscal Period table prior to building the pay period schedule for next year, you can still proceed. You will merely have to rebuild your pay period schedule midway through next year to map to the updated General Ledger Fiscal Period table once it is available. The Pay Period Schedule is located in Payroll Manager, on the Process tab. To build a new pay period schedule: 1. Review the Pay Period Schedule table. If the new pay period schedule has already been built, proceed to Step 4 Create your new statutory holiday schedule. Otherwise, continue. 2. Enter the Payroll Ending Date of the first payroll to be paid next year. 3. Enter the Payroll Pay Date of the first payroll of next year (the date that your employees will be paid). 4. Enter the Number of Pay Periods in the payroll year. (i.e. 12, 24, 26 or 27). 5. Click the Create Pay Schedule button and the new pay period schedule is automatically created. 6. Review the Pay Period Schedule dates that have been created to ensure they are correct. Pay particular attention to the last entry on the Pay Period Schedule. If the final payment date is less than two weeks from the end of the year, you may have chosen an incorrect number of pay periods. If you run a biweekly payroll and Ormed Information Systems Ltd. Page 4 of 14

6 your payment date for pay period 26 falls on or before December 18 th, then investigate whether or not your year actually includes 27 pay periods. If that is the case, delete the entire year s pay period schedule and recreate a new one starting at step 2, this time choosing 27 pay periods. 7. If a scheduled payment date falls on a bank holiday, edit it on this screen. Note that if you modify a payment date from January 1 to December 31 because of a bank holiday, you are actually moving that entire pay period into a different W-2 year. Be sure your pay period schedule accurately reflects the treatment of that cross-over pay period. Note: As noted above, if your finance department has not built the upcoming General Ledger Fiscal Period table, the First Fiscal Year Periods, Split Dates and Second Fiscal Year Periods will only be completed for a portion off the year. This is okay. The Pay Period table can be rebuilt later in the upcoming payroll year (after finance has built the General Ledger Fiscal Period table). Step 4: Enter the statutory holidays for the upcoming year. Your statutory holidays for the upcoming payroll year are set up in Payroll Manager. The Statutory Holiday icon is found under the Scheduling tab. There is no need to remove prior year entries to make room for the new ones. This table is configured to allow year after year data to be stored indefinitely. Sites that use the Time & Attendance products should also add the specific start and stop times for each holiday that generates automatic holiday premiums. These start and stop times are entered in Time & Attendance Manager. Step 5: Verify that the EIN Numbers, State ID and UI Account numbers have been correctly entered for each company code. Whether your site is a single legal company or a multi-entity organization, it is essential that the Employer Identification Number (EIN) be built prior to running W-2s. Go to Payroll Manager >> Process tab and select the EIN Code screen. Each federal entity will have its own EIN Code assigned, which should map to the actual EIN number. Be sure that the State ID and UI Account number fields are also filled in, as these fields will be used during W-2 creation and Quarterly UI reports, respectively. Step 6: Modify Federal tax formulas to reflect rate changes (if any). A new bas module has been created for Go to FTP.ormed.com and locate the Downloads\HRMS\Year_End_USA folder. It contains a file named FITXFunc_2015.bas which is the new tax calculation for Installing this new formula requires a few simple steps: Ormed Information Systems Ltd. Page 5 of 14

7 1. Download the file from the FTP site and save it to your network. Place the new file in your Formulas folder, within the subfolder named Calc. Since each formula has a distinct name, you should not receive a warning that the file will replace an existing one. 2. Create the new formula. a. Go to Payroll Manager Accumulator and select the Federal Withholding Tax category. b. Go to the Formula tab to locate the existing Federal Tax formula (likely FTAX or FITX, but accumulator name may vary by site). c. Add a NEW formula for the Federal Tax accumulator with an effective date for your first pay period in the new year. The first date of the pay period (which often falls in December of the prior year) is a suitable date to use. d. There are several fields that differ from site to site depending on the payroll model that you follow. Please review the existing Federal Tax from the prior year and ensure that these fields have the same values in them: i. Prorate On ii. Calculate on All Employee Jobs e. If desired, enter a description in the Purpose field. This is optional. f. In the formula field, enter the exact name of the bas module that was provided to you, followed by a set of parentheses, as shown on the following screen print example. Ormed Information Systems Ltd. Page 6 of 14

8 3. Verify the installation. If you have successfully attached the new formula, you should be able to view the contents of the bas module by pressing the Formula Builder button and proceeding to the Formula Builder screen. Step 7: Modify State tax formulas to reflect rate changes (if any). If your State levies income tax, the rates may change from year to year. If this is the case, go to Payroll Manager Accumulator and select your State Tax category. Go to the Formula tab and select the State Tax formula (likely STAX or **TX where ** represents your 2 character state abbreviation, but accumulator name may vary by site). Click on Formula Builder to review and/or edit the formula contents. For your convenience, known changes to State taxes are listed below. Please confirm with your local state tax office before making any formula changes. Florida, Texas: These states do not have any state tax. Kentucky: There are no changes to the tax rates or tax brackets for However, the parameter values for Standard Deduction and Exemption Credit have changed Standard Exemption = $ Credit per Exemption Claimed = $10 The newest KYTXFunc.bas formula has two parameters to allow these values to be tracked in the main formula screen. Check your HCMS\Formulas\Calc folder using Windows Explorer to determine whether or not you have the newest formula. If your KYTXFunc.bas file is dated December 2014 or newer, then simply proceed to Step 1 to insert a new formula using the parameter values noted below. If you are currently using the older single parameter version, please download the newer one from the FTP site and place the new file in your Formulas folder, within the subfolder named Calc and then proceed to Step Go to Payroll Manager Accumulator and select the State Withholding Tax category. Ormed Information Systems Ltd. Page 7 of 14

9 2. Go to the Formula tab to locate the existing Kentucky State Tax formula (likely KYTX or similar, but accumulator name may vary by site). 3. Add a NEW formula for the State Tax accumulator with an effective date for your first pay period in the new year. The first date of the pay period (which often falls in December of the prior year) is a suitable date to use. 4. There are several fields that differ from site to site depending on the payroll model that you follow. Please review the existing State Tax from the prior year and ensure that these fields have the same values in them: a. Prorate On b. Calculate on All Employee Jobs 5. If desired, enter a description in the Purpose field. This is optional. 6. In the formula field, enter the exact name of the bas module that was provided to you, followed by a set of parentheses containing the new parameter values, as shown on the following screen print example. Lousiana: At the time of printing, Louisiana had not made any changes to tax rates for Should you become aware of any changes after receiving this document, please contact Support Services for assistance. Minnesota: A new formula has been created for Minnesota state tax. It can be found on the FTP site under Downloads\HRMS\Year_end_USA and is named MNTXFunc_2015.bas. Ormed Information Systems Ltd. Page 8 of 14

10 1. Download the file from the FTP site and save it to your network. Place the new file in your Formulas folder, within the subfolder named Calc. Since each formula has a distinct name, you should not receive a warning that the file will replace an existing one. 2. Create the new formula. a. Go to Payroll Manager Accumulator and select the State Withholding Tax category. b. Go to the Formula tab to locate the existing Minnesota Tax formula (likely MNTX, but accumulator name may vary by site). c. Add a NEW formula for the Federal Tax accumulator with an effective date for your first pay period in the new year. The first date of the pay period (which often falls in December of the prior year) is a suitable date to use. d. There are several fields that differ from site to site depending on the payroll model that you follow. Please review the existing Federal Tax from the prior year and ensure that these fields have the same values in them: i. Prorate On ii. Calculate on All Employee Jobs e. If desired, enter a description in the Purpose field. This is optional. f. In the formula field, enter MNTXFunc_2015(), as shown on the following screen print example. 3. You can confirm that the formula was installed correctly by clicking on the Formula Builder button. If the formula reference matches up to the file that you placed in the Calc folder, it will display inside the Formula Builder window. Ormed Information Systems Ltd. Page 9 of 14

11 Wisconsin: At the time of printing, Wisconsin had not made any changes to tax rates for Should you become aware of any changes after receiving this document, please contact Support Services for assistance. Step 8: Modify Local, School District, City, County tax formulas to reflect rate changes (if any). Repeat the process from Step 6 and/or Step 7 as it relates to any local taxes in place at your site. Pay close attention to formulas that use parameters to hold key rates. Step 9: Update the Social Security Wage formula to reflect the new maximum taxable earnings. Go to Payroll Manager Accumulator and select the Social Security Category and select the formula for Social Security Wages (SSWG). Accumulator codes can vary from site to site, so you may have a different (but similar) code instead. Most Social Security Wage formulas use a parameter for the annual maximum. If yours is set up this way, then press the NEW button to create a similar formula with the revised maximum value for the upcoming year. It is essential that your new formula have the exact same formula reference as the old one, with only the maximum value between the brackets appearing different. (See circled area below). The new calculation formula can be given an effective date for your first pay period. From time to time, the government might also update the tax rates for Social Security and Medicare. While no changes were noted at the time of this document s creation, it is Ormed Information Systems Ltd. Page 10 of 14

12 always advised to check the government publications directly in case of any last minute changes. If your formula does NOT utilize the parameter method of defining the annual maximum, then click on the Formula Builder button to access the maximum rates within the actual bas module and make any necessary edits there. Step 10: Adjust your other formulas to reflect rate changes for the upcoming payroll year. If your benefit plans or union contracts contain any changes that take effect at the beginning of the payroll year, modify your formulas to reflect these changes. Common examples include changes to rates and/or annual limits for Health Savings Accounts, Flex Spending Accounts, Retirement Plans, Workers Compensation, and/or Unemployment. Also, consider if the upcoming year is one with a non-standard 27 pay periods. If so, any formulas that divide an annual allotment by 26 may need to be modified to use the 27 instead. Formula modifications are entered in the Accumulator Maintenance window, which is found on the Payroll Codes tab of the CSS ORMED Payroll Manager module. When making changes to formulas, you may need to make a new copy of the original formula with a new effective date for the modifications. This allows you to enter changes to formulas in advance of the pay period in which they take effect, without affecting the formulas already in place. If the existing formula is no longer required (i.e., there are no more payrolls to run that require the original rates), simply edit the existing formula. If you require assistance with modifications to your formulas or, if you require custom programming, contact CSS ORMED Support Services for assistance. Step 11: Review employee setup and modify any benefit enrolments or tax elections that have changed. With the start of the new payroll year, consider whether the marital status, number of allowances or additional tax elections made by employees the prior year still apply. If any of these values have changed, make the necessary edits in Payroll Employee Manager. Often United Way pledges or other voluntary contributions are re-evaluated at the end of a payroll year. Review the Benefits screen and/or Unique Earnings & Deductions screen for employees participating in such plans and make any required edits to prepare for the new payroll year. Ormed Information Systems Ltd. Page 11 of 14

13 Phase 2 Year-End Close The actual year-end close is performed after the last payroll batch of the year is posted, but prior to beginning the first payroll batch of the new payroll year. This occurs sometime between the middle of December and the middle of January, depending on the dates your employees are paid. If the pay date (the date employees receive their checks/deposits) is in January, the pay period is considered to be part of the new year even if the pay-end date (the last day of the pay period) is actually in December of the year that has just ended. Note: When you close the payroll for the year, a year-end batch is created, zeroing out any accumulators that are set to Zero at Dec. 31. If you intend to run any year-end reports that are built using the ov_hrms_max_hist_ytd_value view, this should be completed BEFORE closing the payroll for the year. Step 1: Make a backup of your payroll system. Before performing the year-end close, ask your IT Department to make a backup of your payroll data files (the HCMS SQL database and the Formulas directory). Store these backups in a safe location until after your W-2 summaries have been sent to the IRS. A backup allows you to perform a complete recovery of your system in the unlikely event of a disruption during the year-end close process. Step 2: Close payroll for the year. Once you are confident that your accumulator settings are correct (as explained in Phase 1 Step 2 above), close your payroll system for the completed payroll year. To close your payroll system for the payroll year: 1. Launch the CSS ORMED Payroll module. 2. Go to the sidebar and click the Year End tab. 3. Click the Calculate icon. The Year End Calculation window opens. 4. Select the year-end date from the calendar for the pay period that the year-end batch will be posted to. Note: CSS ORMED recommends that you select the first day of the first pay period of the new year, preventing possible conflicts with associated reporting which uses the pay period end date of the last payroll of the year is ending. Ormed Information Systems Ltd. Page 12 of 14

14 The calculation creates a register containing negative entries to zero out the required accumulators. As such, you will have an audit trail of the values prior to the year-end close, as well as the adjustment that was required to bring the balance down to zero. All accumulators that have Zero on Dec. 31 checked off are reset to zero. 5. Click the Calculate button to begin the register creation. 6. Once the year-end register has been calculated, review it online prior to finalizing the batch. Click the View Registers icon to launch the View Registers window. Print the registers, if desired. Note: The year-end batch registers can also be exported to a.pdf document for reference purposes. 7. If the registers appear correct, then the batch can be closed by posting it. Click the Post icon to launch the Posting window. You will notice that only one task is checked off for completion Update YTD Values. This means that the YTD values will be updated to reflect the year-end register activity. No other posting features are required for a year-end batch. 8. Click the Post button to complete the posting. Congratulations! You have successfully completed your Year End Close. Ormed Information Systems Ltd. Page 13 of 14

15 Phase 3 Prepare Employee W-2 Slips Employee W-2 slips are prepared in the CSS ORMED Statutory Reports module. Step-by-step instructions for preparing employee W-2 slips and electronic downloads are contained in separate help documents and will be made available on our FTP site at or ftp://ftp@ormed.com in early January. The file will be located under Downloads >> HRMS >> Year_End_USA. The document is named: CSSORMED_2014_W2 User Guide.pdf Ormed Information Systems Ltd. Page 14 of 14

16 Contact Us Questions and Support If you have any questions or concerns about this document or relevant business processes, please a Product Support Specialist at hrms_support@ormed.com. We will be pleased to assist you. What Are Your Thoughts? If you have any suggestions for how we can improve this document, please send them to feedback@ormed.com with the subject line Feedback USA Payroll Year-End Procedures User Guide. Your feedback assists us in better serving you. V3.0 (December 2014) All rights reserved. ORMED MIS, ORMED X, and ORMED X Easy Pay are trademarks of Ormed Information Systems Ltd. All other trademarks are the property of their rightful owners. Ormed Information Systems Ltd. Page 15 of 14