Issue/Symptom/Question

Payroll Setup

Applies To

Penta for Windows

Payroll

Reference Manual

Resolution/Fix/Answer

1. Set Country Code and Tax Id System Options

A. Review and adjust System Option settings if needed.

System Management > Technical Support > Options

1. Query System Option 257 (Default Payroll Country Code) and adjust its setting if needed.
   This determines which Payroll Country Code defaults in the Employee Payroll Information window. Setting Option 257 to:

• C sets the Default Country Code to CAN (Canada)

• U sets the Default Country Code to USA (United States). U is the System Option default value.

• N sets the Default Country Code to None (no default)

Notes:

• In the Employee Payroll Information window, you can override the defaulting Payroll Country Code.

• In the Define Users window, you can also define a PENTA user-level Default Payroll Country Code. The user-level default has priority over the system default.

1. Query System Option 258 (Allow All Tax Id Values) and adjust its setting if needed.
   This determines how PENTA verifies values entered in the Employee Payroll Information window’s Tax Id # field. Setting Option 258 to:

• Y allows entry of all Tax Id values. PENTA verifies for uniqueness only.

• N allows entry only of Tax Id values in correct format. N is the System Option default value.

Notes:

• For USA Payroll employees, the Tax Id must be in standard USA format (999-99-9999), with no section entirely filled with zeros. PENTA verifies uniqueness.

• For Canadian Payroll employees, the Tax Id must be in standard Canadian format (999 999 999) and the last digit must be a valid “check digit” based on the first eight digits. PENTA verifies uniqueness.

1. Review other System Options affecting payroll as required by your company.

1. Close the window to commit your changes.

2. Update Group Security

A. Grant payroll access to Security Groups.

By default, Security Groups do not have authorization for Payroll windows and reports.

System Management > Security > Security Groups

1. Query any Payroll-related Security Groups.

1. Use the available tabs to grant the appropriate Window, Module, and Report security to the Security Group.

1. Close the window to commit your changes.

3. Define Users

A. Grant payroll access to PENTA users.

Notes:

• See System Management’s Define Users Window Description for information on setting up PENTA users. This step assumes users are already set up.

• In the Employee Payroll Information window’s Setup/Groups tab, you can define an employee-level Default Payroll Country Code.

• A User-level Default Payroll Country Code has priority over the system-level default (System Option 257).

System Management > Security > Define Users

1. Open the Setup/Groups tab.

1. Query the User you want to grant access to.

1. Enter a Default Payroll Country Code.
   Valid codes are CAN (Canada), USA (United States), or blank (No Payroll Country).

1. Customize other User settings such as:

• Hour Type Authorization (use the Setup/Groups tab’s pop-up window)

• Hour Class Authorization (use the Setup/Groups tab’s pop-up window)

• Payroll Report Authorization (use the Report Authorization tab)

• Pay Group Authorization (use the Pay Groups tab)

• Payroll Time Entry details (use the Module Security tab)

1. Close the window to commit your changes.

4. Establish General Ledger Accounts for Payroll Accruals & Expenses

A. Establish accounts.

Finance & Accounting > Setup > Accounts > Chart of Accounts

1. Establish an account for each item:

• Payroll Accrual Account

• Standard Charge Accounts

• Contra Account

• Regular Expense Account

• OT (Straight) Account

• OT (Premium) Account

1. Establish accrual and expense accounts as necessary for each applicable tax (e.g., FICA, FIT, FUT, SIT, SUT, SDI, SUI, WC, PL, and Local taxes).

1. Close the window to commit your changes.

5. Define Organizational Units

A. Identify the Organizational Unit.

Finance & Accounting > Setup > Organizational Units > Organizational Units

1. If needed, use the Setup/Address tab to set up a new Organizational Unit; otherwise query the desired Organizational Unit.

1. Open the Legal Entity tab.

1. Enter your Federal Id.

1. If needed, enter direct deposit parameters in the Direct Deposit pop-up window.

1. If needed, enter Equal Employment Opportunity elements in the EEO Information pop-up window.

1. If needed, enter tax-filing parameters in the ADP pop-up window.

1. Close the window to commit your changes.

6. Define Bank Information

A. Define Bank Numbers.

Finance & Accounting > Setup > Bank Information > Bank Numbers

1. If you use PENTAChecks to produce laser-printed MICR-encoded checks, Bank Number setup must adhere to PENTAChecks requirements.
   For more details, see PENTAChecks in the Appendix.

B. Define Bank Accounts.

Finance & Accounting > Setup > Bank Information > Bank Account Numbers

1. If you use PENTAChecks to produce laser-printed MICR-encoded checks, Bank Account Numbers setup must adhere to PENTAChecks requirements.
   For more details, see PENTAChecks in the Appendix.

1. Close the window to commit your changes.

C. Define Cash Accounts.

Finance & Accounting > Setup > Accounts > Cash Accounts

1. Establish a payroll Cash Account.
   If you use PENTAChecks to produce laser-printed MICR-encoded checks, see PENTAChecks in the Appendix.

1. Close the window to commit your changes.

7. Define Check Forms

A. Establish check form information.

Finance & Accounting > Setup > Form Information

1. Establish check form information by assigning a Cash Account and Layout # to a Form Id.
   If you use PENTAChecks to produce laser-printed MICR-encoded checks, see PENTAChecks in the Appendix.

1. Close the window to commit your changes.

8. Define Direct Burden Rules

A. Define direct burden distribution rules.

Payroll > Setup > Taxes > Direct Burden Distribution

1. Create direct burden distribution rules for Federal and State Tax Type Codes

1. Close the window to commit your changes.

9. Define Payroll Federal & Tax Accrual and Expense Accounts

A. Setup Payroll federal and tax accrual and expense Accounts.

Payroll > Setup > Legal Entity Information > US Payroll Accrual/Expense Accounts

1. Set up Payroll Accrual/Expense Accounts on the Accrual Accounts tab:

1. Enter a Legal Entity OU Id

1. Enter accounts for Payroll, FICA, FIT, FUT, SIT, SUT, SDI, SUI, WC, PL, and Vendor Id—if using AP Edit rule Accrual Accounts.

1. Use the Expense Accounts tab to set up Payroll Accrual/Expense Accounts, entering accounts in for FICA, FUT, SUT, SDI, SUI, WC, and PL.

1. Use the Expense Accounts tab to enter Default Standard Charging Accounts for Contra Account, Regular Expense Account, OT (Straight) Expense Account, and OT (Premium) Expense Account.

1. Close the window to commit your changes.

Notes:

• In the State Tax Information window, you can set up state accrual and expense accounts that will override values entered in the US Payroll Accrual/Expense Accounts window.

• At the Payroll Class level, set up payroll accrual, standard charge expense, and standard charge contract accounts to override values entered in the US Payroll Accrual/Expense Accounts window.

10. Define State Tax Requirements

A. PENTA is configured with standard state and province codes. If needed, set up any non-standard state or province codes.

Payroll > Setup > Taxes > State Codes

1. Set up the State/Province tab.

1. Enter a default Local Reciprocal Rule #

1. Enter a State Unemployment (SUT) Information record with the current rate if the Wage Limit displayed is not current and you accrue SUT in the state.

1. Enter State Workers Compensation Earnings Information if applicable at the state level.

1. The Workers Compensation wage limits you enter in this window apply to all records defined in the Workers Compensation Codes and Rates window. If you also enter wage limits in the Workers Compensation Codes and Rates window for individual workers’ compensation codes, PENTA uses the lower of the two.

1. The Include Premium Pay in Calculation field is unique to this window; it does not appear on the Workers Compensation Codes and Rates window.

1. If required for the state, open the Enter Weeks Worked Rules pop-up and define weeks worked rules.

1. Set up the Reciprocity tab:

1. Set up state-to-state Reciprocity Rules in the State/Province Level section.

1. Set up state to local Reciprocity Rules in the Local Level section.

B. Define state tax information.

Payroll > Setup > Taxes > State Tax Information

1. Set up the SUT/FUT Rates tab:

1. Enter a Legal Entity OU Id

1. Enter a State Code

1. Enter a State Tax Id #

1. Enter a State UC Id #

1. Optionally enter a State Control Id # For Quarterly Wage Reporting.

1. Enter Accrual Accounts (and a Vendor Id if the accrual account is an AP Edit Rule account) for SIT, SUT, SDI, and SUI.

1. Enter Expense Accounts for SUT, SDI, and SUI.

1. Enter a SUT Rate.

1. Optionally enter a State FUT Rate.

1. Enter Effective Date for SUT/FUT Rates.

1. Optionally enter a State EAF Rate.

1. Optionally set up the SDI/SUI Rates/Limits tab:

1. Enter Employee SDI Rates and Limits.

1. Enter Employer SUI Rates and Limits.

1. Close the window to commit your changes.

11. Define Local Tax Jurisdiction Requirements

A. Define local tax jurisdiction information.

Payroll > Setup > Taxes > Local Taxing Authorities

1. Define locality-to-locality Reciprocity Rules, as well as calculation rates and parameters.
   For requirements, refer to publications issued by each locality.

1. If more than one local tax applies to a jurisdiction, use the Other Localities in Jurisdiction section to link other local taxing authority codes to the current record.
   PENTA processes the local taxes linked via this block when you process the tax they are linked to.

1. Close the window to commit your changes.

12. Define Hour Classification Codes

A. Enter Hour Classification Codes.

Payroll > Setup > PTO and Hours Classifications Codes > Hour Classification Codes

1. Enter Hour Classification Codes information.
   EI and ROE reporting fields in this window pertain to Canadian Payroll and are not accessible for non-Canadian payroll.

1. Close the window to commit your changes.

13. Implement Paid Time Off Tracking

A. Track accrual and use of vacation time.

Implement Paid Time Off (PTO) Tracking (procedure)

1. Track accrual and use of vacation time and other PTO via PTO accrual schedules by referring to and performing the Implement Paid Time Off (PTO) Tracking Business Process.
   Here you can assign a paid time off schedule to individual employees or payroll classes.

1. Return to this Business Process and proceed to the next step.

14. Set Up Employee Status Reason Codes

A. Set up employee status reason codes.

Payroll > Employees > Other Employee Attributes > Employee Status Reason Code

1. Set up employee status reason codes for use in the Employee Payroll Information window’s Stat Chng Type # field.
   Status reason codes explain changes in an employee’s status (e.g., laid off, rehired, etc.).

1. Close the window to commit your changes.

15. Define Pay Groups

A. Define Pay Groups.

Payroll > Setup > Pay Groups, Payroll Classes and Workers Compensation > Pay Groups

1. Enter Pay Group information.
   Pay groups establish pay frequency and other check parameters. When creating employee master records in the Employee Payroll Information window, you assign the employee to a Pay Group.

1. Close the window to commit your changes.

16. Define Workers’ Compensation Codes & Rates

A. Set up Worker Compensation codes and rates.

Payroll > Setup > Pay Groups, Payroll Classes and Workers Compensation > Workers Compensation Codes and Rates

1. Set up Worker Compensation Codes and Rates.
   Notes:

• The Tax Type associated with Workers Compensation for US payroll is WC.

• See the Payroll Classes Window Description and Project Management’s Job Information Window Description for information on PENTA’s workers’ compensation code selection hierarchy.

1. Close the window to commit your changes.

17. Define Master Fringe Benefit Information

A. Enter primary Union Fringe Benefit information.

Payroll > Setup > Pay Groups, Payroll Classes and Workers Compensation > Union Fringe Benefit Information

1. Enter primary Union Fringe Benefit Information

• Fringe Number

• Description

• Status

• Class

• Print If Non-Taxable

1. Define Union Fringe Benefit calculation information with other union-specific items when payroll classes are set up.

1. Close the window to commit your changes.

18. Set Up Trade Types

A. Define Trade Types.

You can later use Trade Types to identify the skill set associated with a Payroll Class.

Payroll > Setup > Pay Groups, Payroll Classes and Workers Compensation > Trade Types

1. Enter a Trade Type # and Description.

1. Repeat for each Trade Type you need to define.

1. Close the window to commit your changes.

19. Define Payroll Classes

A. Define Payroll Classes.

Payroll > Setup > Pay Groups, Payroll Classes and Workers Compensation > Payroll Classes

1. Set up the Master tab.

1. Set up the Standard Charging tab.

1. Optionally establish default Pay Rates on the Standard Charging tab.
   You can customize pay rate setup in the following windows:

• Employee Payroll Information

• Pay Rate/Standard Charge Schedules

• Job Employee Pay Rate /Charge Schedule

• Job Pay Rate /Standard Charge Schedule

• Job Type Pay Rate/Standard Charge Schedule

• Job/CT/CC Pay Rate/Charge Schedule

1. Assign Union Fringe Benefits and define calculation information in the Fringe Benefits tab.

1. Optionally establish default fringe information on the Fringe Benefits tab.
   You can customize fringe benefit setup in the Job Fringe Override window:

1. If using fringe Calculation Base #18 (% of Base Rate x Hours), enter the number of the Pay Rate representing the maximum standard pay rate for the Payroll Class in the Master tab’s Maximum Standard Pay Rt # field.
   The Pay Rate # must be valid for the Payroll Class. The rate used in Calculation Base 18 computations is the lesser of the regular hourly rate on a timecard and the rate identified by the pay rate number in the Maximum Standard Pay Rt # field.

1. Optionally open the Tax Rule Exceptions window to establish taxation exceptions for fringes with:

• Taxable (Y/N) = N

• Deduct From Check/Employee Paid (Y/N) = Y

1. Set up the Non-Taxable Fringe Distr tab.

1. Set up the Shift/Haz Duty Premiums tab.

1. Set up the OU Validation tab.

1. Set up the O/T Premium Distribution tab.

1. Close the window to commit your changes.

20. Set Up & Assign Departments

A. Create a department.

Payroll > Employees > Other Employee Attributes > Department Information

1. Create a Department Number and Description.

1. Set the Status Code to Active.

1. Repeat for each Department you need to set up.

1. Close the window to commit your changes.

B. Assign Departments to Employees for third-party reporting purposes.

Payroll > Employees > Employee Payroll Information > Master tab > Departments

1. Query the appropriate employee.

1. In the Master tab’s Dept field, associate the employee with a Department.

1. Close the window to commit your changes.