Chapter 10: Set Up Benefit/Deductions
CHAPTER 10: SET UP BENEFIT/DEDUCTIONS Objectives The objectives are: •
Introduce procedures for setting up benefit/deductions.
•
Introduce the process of setting up statutory deductions.
Introduction This course introduces procedures for setting up benefit deductions in the Payroll module. The general process for setting up statutory deductions (a specific type of benefit deductions) is also provided. More information on statutory deductions for your area may be available at Partner Source.
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Microsoft Dynamics® AX Payroll
Benefit/Deduction Setup Procedures This course introduces key procedures required for setting up benefit/deductions for a client. Courses 2, 3, 4, and 6 covered the basic concepts and use of benefit/deductions; in this course you will learn the detailed procedures for setting up benefit/deductions during an implementation. Recall that examples of benefit/deductions include the following: •
National, provincial, or local income taxes
•
Insurance plans (for example, dental, health, or life insurance)
•
Company-specified fees such as charges for parking, use of a company gym
•
Deductions for pension plans
•
Union or professional dues
•
Court-ordered deductions (garnishments, child support)
•
Advance recovery deductions (used after an employee has received a pay advance)
•
Negative net deductions (used when an employee has more deductions than earnings on a payment, and an advance is created to bring net pay to zero)
The following are properties and characteristics of benefit/deductions that you must set up during implementation: •
Benefit/deduction enrollments (if necessary)
•
Benefit/deduction groups (if used)
•
Benefit/deduction types (if used)
•
Benefit/deductions
•
Advance recovery and negative net deduction code parameters
•
Benefit/deduction rule groups
•
Benefit/deduction accumulators
•
Benefit/deduction calculations
•
Scheduling benefit/deductions
Procedure: Set Up a Benefit/Deduction Enrollment Code You can use benefit/deduction enrollment codes for benefit/deductions that have more than one calculation, such as deduction amounts, depending on family status (single, family, or couple), or flat rate or percentage rate options. For example, a health insurance deduction calculation might vary, depending on how many family members are enrolled in the plan.
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Chapter 10: Set Up Benefit/Deductions Create benefit/deduction enrollment codes before you create benefit/deduction codes. Follow these steps to set up benefit/deduction enrollment codes. 1. In the Payroll area page, find the Setup area and then click Benefit/Deductions. Click Benefit/Deduction enrollments. 2. Press CTRL+N to create a new benefit/deduction enrollment code, and then select the General tab. 3. In the Benefit/deduction enrollment field, enter a code up to 20 characters that represents the benefit/deduction enrollment. 4. Alter the Short code if you want. 5. In the Benefit/deduction enrollment description field, enter a description up to 50 characters of the benefit/deduction enrollment. 6. Confirm that the Active date and Expiry date are correct for the benefit/deduction enrollment code.
Procedure: Set Up a Benefit/Deduction Type Benefit/deduction types are optional and are used for classification and reporting purposes only. For example, you can use benefit/deduction types to classify benefit/deductions as either mandatory or optional. If you use benefit/deduction types, create them before benefit/deduction codes. Follow these steps to set up benefit/deduction types. 1. In the Payroll area page, find the Setup area, and then click Benefit/Deductions. Click Benefit/Deduction types. 2. Press CTRL+N to create a new benefit/deduction type code, and then select the General tab. 3. In the Benefit/deduction type field, enter a code up to 20 characters that represents the benefit/deduction type. 4. Alter the Short code if you want. 5. In the Benefit/deduction type description field, enter a description up to 50 characters of the benefit/deduction type. 6. Confirm that the Active date and Expiry date are correct for the benefit/deduction type.
Procedure: Set Up a Benefit/Deduction Code You must create benefit/deduction codes for each benefit and deduction that needs to calculate (whether it be employee-paid or employer-paid). When you create the benefit deduction code, you can associate it with accounting, enrollment, and type information. If the client organization issues pay advances, then create benefit/deduction codes to recover pay advances and to recover negative net pay advances.
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Microsoft Dynamics速 AX Payroll You can enter accounting information for the General Ledger and Accounts Payable modules in the Benefit/deduction form, but it is not required data. Follow these steps to set up a benefit/deduction code. 1. In the Payroll area page, find the Setup area and click to expand Benefit/Deductions. Click Benefit/Deductions. 2. Press CTRL+N to create a new benefit/deduction code, and select the General tab. 3. In the Benefit/deduction field, enter a code up to 20 characters that represents the benefit/deduction. 4. Alter the Short code if you want. 5. In the Benefit/deduction description field, enter a description up to 50 characters of the benefit/deduction. 6. Ignore the Version fields, which are only used for benefit/deductions that are supplied with the system. 7. Select the applicable Benefit/deduction type from the benefit/deduction type table. 8. In the Calculation sequence number field, enter a number that dictates the order in which this benefit/deduction calculates during pay processing. If a benefit/deduction calculation is based on the result of another benefit/deduction calculation, you must assign the sequence numbers accordingly. 9. In the Depletion sequence field, enter a number that dictates the order in which to subtract the benefit/deduction from gross pay (for example, garnishes can be taken before taxes, and taxes can be taken before voluntary benefit/deductions). 10. In the Insufficient funds field, select the option to use when an employee's gross pay is less than the employee's deductions. 11. In the Prepaid allowed field, indicate whether the employee can prepay benefit/deductions (for example, if the employee is on unpaid leave). 12. In the Benefit field, select Yes to print the benefit/deduction in the benefit section on the pay statement, or No to print the benefit/deduction in the deduction section of the pay statement. 13. In the Apportion field, select Yes to apportion (multiply by the percentage of the pay period that it is in effect) this benefit/deduction, or No to apply it in full regardless of when it comes into effect during the pay period. 14. In the Date period type field, select the date to calculate the benefit/deduction: Statement date for the check/direct deposit statement date; Pay period end date; Pay period start date; or Context date for the current date in the payroll system. 15. In the Display sequence field, enter a number that dictates the order in which this benefit/deduction displays on reports and screens.
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Chapter 10: Set Up Benefit/Deductions 16. In the Print on statements field, select Yes to print the benefit/deduction on the pay statement or No to suppress printing on the pay statement. 17. In the Statement description field, enter the description for the benefit/deduction that prints on employee pay statements. 18. In the Statement sequence field, enter a number that dictates the order in which this benefit/deduction displays on employee pay statements. The lowest number displays first. For example, a statement sequence10 benefit/deduction displays before a statement sequence 20 benefit/deduction. Benefit/deductions with the same statement sequence number sort alphabetically. 19. In the Print employer amount field select Yes to print the employer deduction on the pay statement or No to suppress printing on the pay statement. 20. In the Ledger account field, enter the General Ledger account for this benefit/deduction, for employee and/or employer deductions. 21. In the Department field, enter the department that this benefit/deduction will be charged to (debit accounting) or credited to (credit accounting), for employee and/or employer deductions. 22. In the Cost center field, enter the cost center that this benefit/deduction will be charged to (debit accounting) or credited to (credit accounting), for employee and/or employer deductions. 23. In the Purpose field, enter the nature of the expense account that this benefit/deduction will be charged to (debit accounting) or credited to (credit accounting), for employee and/or employer deductions. 24. In the AP vendor field, enter the Accounts Payable vendor code for this benefit/deduction for employee and/or employer deductions. 25. Confirm that the Active date and Expiry date are correct for the benefit deduction code. 26. Click the Benefit/deduction Enrollment Selections tab and move the enrollments that apply to this benefit/deduction to the Benefit/deduction enrollments selected list. Available enrollments display in the Benefit/deduction enrollments remaining list.
NOTE: Benefit/deductions that always use the same calculation do not require an enrollment code.
Procedure: Set Up the Advance Recovery and Negative Net Deduction Code Parameters This topic describes how to set up two parameters that are used to recover: •
pay advances
•
negative net pay advances
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Microsoft Dynamics® AX Payroll If the organization issues pay advances, then you must set up benefit/deduction codes to recover both pay advances and negative net pay advances. You first must set up the benefit/deduction codes for these two parameters in the benefit/deductions table. Follow these steps to set up advance recovery and negative net deduction parameters. 1. In the Payroll area page, find the Forms area and click Setup. And then click Parameters. 2. Select the Search tab, enter the General definition code "Advance recovery deduction code", and click Search. 3. In the String value field, select the benefit/deduction code for recovering an advance from a future payment after an employee receives a pay advance. 4. Confirm that the Active date and Expiry date are correct for the benefit/deduction code. 5. Select the Search tab, enter the General definition code "Negative net deduction code", and click Search. 6. In the String value field, select the benefit/deduction code for recovering negative net advances. Negative net pay can occur when an employee has more deductions than earnings on a payment, and an advance is created to bring net pay to zero. The advance is recovered automatically as a benefit/deduction on a future payment. 7. Confirm that the Active date and Expiry date are correct for the benefit/deduction code.
Procedure: Set Up a Benefit/Deduction Group Use benefit/deduction groups for: •
reporting purposes
•
associating benefit/deductions with accumulators
•
associating benefit/deductions with payment types
•
associating benefit/deductions with cafeteria plans
•
scheduling benefit/deductions to calculate in specific pay periods
You can use benefit/deduction groups to simplify data entry when scheduling benefit/deductions. A user may choose to create a benefit deduction group called "regular payments," which can then be scheduled for every regular pay period. Once the benefit/deduction group is scheduled, new benefit/deductions that are added to the group automatically become scheduled as well. Benefit/deduction groups are optional; set them up after benefit/deduction codes.
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Chapter 10: Set Up Benefit/Deductions Follow these steps to set up a benefit/deduction group. 1. In the Payroll area page, find the Setup area and click Benefit/Deductions, and then click Benefit/deduction groups. 2. Press CTRL+N to create a new benefit/deduction group code, and then select the General tab. 3. In the Benefit/deduction group field, enter a code up to 20 characters that represents the benefit/deduction group. 4. Alter the Short code if you want. 5. In the Benefit/deduction group description field, enter a description up to 50 characters of the benefit/deduction group. 6. To print the benefit/deduction group on pay statements select Yes for the Print on statements option. The benefit/deductions summary will display on one line on the pay statement using the Statement description entered below. 7. If you selected Yes for the Print on statements option, enter a Statement sequence number to indicate where in the benefit/deduction section of the pay statement this benefit/deduction group will print (sequence number 1 will print at the top of the section). 8. If you selected Yes for the Print on statements option, enter a Statement description up to 30 characters to print a summary for the benefit/deduction group. 9. If you selected Yes for the Print on statements option, select Yes for the Print employer amount option to print the employer benefit/deduction amount on the pay statement. If you select No, only the employee benefit/deduction amount will print on the pay statement. 10. Confirm that the Active date and Expiry date are correct for the benefit/deduction group code. 11. Click the Benefit deduction group benefit deductions tab and move the benefit/deductions that apply to this benefit/deduction group to the Benefit deductions selected list. Available benefit/deductions display in the Benefit deductions remaining list.
Procedure: Set Up a Benefit/Deduction Rule Group You can use benefit/deduction rule groups to link a benefit/deduction group, a benefit/deduction code, and optionally a benefit/deduction enrollment code. The benefit deduction rule group also helps determine the calculation(s) to perform for the benefit/deduction group.
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Microsoft Dynamics速 AX Payroll Recall that benefit/deduction rule groups help minimize the workload in selecting benefit/deductions for new employees, and minimize benefit/deduction maintenance for payroll administrators. Benefit/deduction rule groups are collections of benefit/deductions that apply to a specific set of employees, such as all the Production workers in the company, or all the Management staff. NOTE: At least one benefit/deduction rule group must be set up (for example, an "All staff" rule group), or no benefit/deductions will calculate. Follow these steps to set up a benefit/deduction rule group. 1. In the Payroll area page, find the Setup area and click Benefit/Deductions, and then click Benefit/deduction rule groups. 2. Press CTRL+N to create a new benefit/deduction rule group, and then select the General tab. 3. In the Benefit/deduction rule group field, enter a code up to 20 characters that represents the benefit/deduction rule group. 4. Alter the Short code if you want. 5. In the Benefit/deduction group description field, enter a description up to 50 characters of the benefit/deduction group enrollment. 6. Confirm that the Active date and Expiry date are correct for the benefit/deduction rule group code.
Procedure: Set Up a Benefit/Deduction Accumulator Some benefit/deduction calculations use specific benefit/deduction accumulators. Create these accumulators after benefit/deduction rule groups, but before benefit deduction calculations. Benefit/deduction accumulators typically are used for monthly, quarterly, or annual reporting (for example, taxable earnings, tax deducted, union dues deducted) and for pay period benefit/deduction calculations (for example, eligible taxable earnings, earnings eligible for pension). Recall that you can define accumulators at the employee level, employee/position level, pay group level, and company level. Accumulators have their own date periodicity; you can map each accumulator to a date period (weekly, calendar month, calendar quarter, fiscal year, and so on) as defined on the Date periods table. Follow these steps to set up a benefit/deduction accumulator. 1. In the Payroll area page, find the Setup area and click Accumulators, and then click Accumulators. 2. Press CTRL+N to create a new accumulator, and then select the General tab.
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Chapter 10: Set Up Benefit/Deductions 3. In the Accumulator field, enter a code up to 20 characters that represents the benefit/deduction accumulator. 4. Alter the Short code if you want. 5. In the Accumulator description field, enter a description up to 50 characters of the benefit/deduction accumulator. 6. Ignore the Version field; it only is used for benefit/deduction accumulators that are supplied with the system. You cannot enter or change them. 7. Ignore the Country/region and State fields; they only are used for benefit/deduction accumulators that are supplied with the system. You cannot change them. Do not enter values in these fields. 8. Select the date period for the accumulator from the Date periods table. The date period dictates the start and end date for amounts accumulated. 9. In the Accumulator type field, select the appropriate level for the accumulator: • A Company accumulator type will accumulate values across the entire company, such as total income tax deducted. •
A Pay group accumulator will accumulate values for all employees in a pay group, such as total net pay.
•
An Employee accumulator will accumulate values for all of an employee's positions.
•
An Employee/position accumulator will accumulate values for each of an employee's positions, such as union dues deducted.
10. In the Accumulator unit type field, select the appropriate type of accumulator; several of the options you can choose apply to earnings rather than benefit/deductions: • Employee deduction amount for employee-paid deductions. •
Employer deduction amount for employer-paid deductions.
•
Total deduction amount for employee-paid and employer-paid deductions.
•
Net amount for net pay accumulations.
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Payment amount for payment amount accumulations (gross pay minus deductions plus advances).
•
Earning hours for earning hours accumulations.
•
Earning units for accumulations of earning units or pieces.
•
Earning amount for earning amount accumulations.
•
Earning occurrences for accumulations of occurrences or instances.
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Microsoft Dynamics® AX Payroll 11. In the Date period type field, select the date to derive the period for the accumulator: • Statement date for the check/direct deposit statement date. •
Pay period end date
•
Pay period start date
•
Earning date for the date on the earning record.
•
Work date for the date on the work record
•
Context date for the current date in the payroll system.
12. In the Read type field, select Incremental amount to use the accumulator amount accumulated since the last payment, or Full amount to use the total accumulator amount for all benefit/deductions generated in the pay period. 13. In the Prior Period field, select Yes if the accumulator needs adjustment in a previous pay period to reflect prior period adjustments, or No if the accumulator in the current pay period needs adjustment. 14. Confirm that the Active date and Expiry date are correct for the benefit/deduction accumulator. 15. Click Setup to open the Accumulator values table. 16. In the Accumulator values table, select the Fast Entry tab, then the appropriate benefit/deduction accumulator or benefit/deduction group code. If required, you also can apply a factor amount to the values adding to an accumulator. The item to be accumulated multiplies by the factor and the result is added to the accumulator. By default, the factor is 1.00. 17. Click Insert to create the accumulator value. 18. Return to the previous screen and click Setup to open the Accumulator eligibility table. 19. In the Accumulator eligibility table, select the Fast Entry tab, then the appropriate benefit/deduction accumulator. 20. Select any combination of Organization units, Occupations, Position types, Position assignment types, Pay groups, and/or Position filters to dictate which employees are eligible for the accumulator. NOTE: You must set up at least one eligibility record, or no employees will be eligible for this accumulator. 21. Click Insert to create the accumulator eligibility.
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Chapter 10: Set Up Benefit/Deductions Procedure: Set Up a Benefit/Deduction Calculation Most benefit/deductions must use specific benefit/deduction calculations. Create them after benefit/deduction accumulators but before benefit deduction rule group calculations. Set up a calculation for each different type of benefit/deduction and enrollment required, such as health plan, life insurance, union dues, and third-party demands. Calculations are associated with benefit/deductions on the Benefit/deduction rule group calculations form. Examples include the following: •
An employee wants to deduct a specific amount as a charitable donation every pay period.
•
An employee has a court order that requires 30 percent of the employee's gross pay to be garnisheed every pay period.
•
A health plan for regular employees has flat rates that depend on how many family members are enrolled in the plan with a different amount for singles, couples, and families. (This would be set up as three separate flat-rate calculations.)
Follow these steps to set up a benefit/deduction calculation. 1. In the Payroll area page, find the Setup area and click Calculations, and then click Calculations. 2. Press CTRL+N to create a new calculation, and select the General tab. 3. In the Calculation field, enter a code up to 20 characters that represents the benefit/deduction calculation. 4. Alter the Short code if you want. 5. In the Calculation description field, enter a description up to 50 characters of the benefit/deduction calculation. 6. Ignore the Version field; it only is used for benefit/deduction calculations that are supplied with the system. You cannot enter or change them. 7. Ignore the Country/region and State fields; they only are used for benefit/deduction calculations that are supplied with the system; you cannot change them. Do not enter values in these fields. 8. In the Display in list field, select No if this calculation is one component of another calculation, to prevent it from displaying in select lists. 9. Confirm that the Active date and Expiry date are correct for the benefit/deduction calculation. 10. Click the Rule tab and then click Edit. 11. Press Delete to delete 0.00 in the calculation string.
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Microsoft Dynamics速 AX Payroll 12. Build the calculation by selecting operands, operators, flat amounts, rounding options, date difference parameters, and calculation rates as appropriate, and and then click Add operand. See Course 7, "Payroll Calculations" for more information about calculations. 13. Click Validate to confirm that the calculation is valid. 14. Click Save to save the calculation. The following are some sample calculations: Description
Calculation string
Operand
Any calculation based on a fixed rate of an employee's gross pay, such as a deduction of 30% of gross pay for a garnishment or court order
GROSS*0.3
Accumulator: GROSS (an Accumulator that accumulates all earnings that contribute to gross pay)
Any calculation based on a fixed amount
25.00
Flat amount of 25.00 will be deducted each pay period when the deduction is scheduled
Any calculation based on annual salary
(ANNUAL SALARY * 7.00) * 0.00015
Employee attribute: Annual salary
Procedure: Set Up Benefit/Deduction Rule Group Calculations A benefit/deduction rule group calculation is the combination of a benefit/deduction rule group, a benefit/deduction, and/or benefit/deduction group, and optionally a benefit/deduction enrollment code. The purpose of a benefit/deduction rule group calculation is to specify the calculation(s) to use for this combination. You can set up single or multiple calculation rules at the same time. Examples are in the following table:
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Benefit/deduction rule group
Benefit/deduction
Enrollment
Calculation
Staff
Health plan
Single
HPS
Staff
Health plan
Family
HPF
Staff
Union dues
Exec
Health plan
Exec
Life Insurance
Dues Single
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HPS Life
Chapter 10: Set Up Benefit/Deductions Follow these steps to set up a single calculation combination. 1. In the Payroll area page, find the Setup area and click Benefit/Deductions, and then click Benefit/Deduction Rule Group Calculations. 2. Press CTRL+N to create a new rule group calculation combination and select the General tab. 3. In the Benefit/deduction rule group field, select the benefit/deduction rule group from the Benefit/deduction rule groups table. 4. Select the Active date when this benefit/deduction rule group calculation combination takes effect. 5. In the Benefit/deduction field, select the benefit/deduction code from the Benefit/deductions table. 6. In the Benefit/deduction group field, select a benefit/deduction group from the Benefit/deduction groups table, if applicable. 7. In the Benefit/deduction enrollment field, select a benefit/deduction enrollment from the Benefit/deduction enrollments table, if applicable. 8. In the Employer calculation field, select the appropriate calculation from the Calculations table for the employer part of the benefit/deduction, if applicable. 9. In the Employee calculation field, select the appropriate calculation from the Calculations table for the employee part of the benefit/deduction, if applicable. Follow these steps to set up multiple calculation combinations. 1. In the Payroll area page, find the Setup area and click Benefit/Deductions, and then click Benefit/Deduction Rule Group Calculations. 2. Press CTRL+N to create a new rule group calculation combination and select the Fast Entry tab. 3. In the Benefit/deduction rule groups field, select one, many, or all entries from the Benefit/deduction rule groups table. 4. In the Benefit/deductions field, select one, many, or all entries from the Benefit/deductions table. 5. In the Benefit/deduction groups field, select one, many, or all entries from the Benefit/deduction groups table, if applicable. 6. In the Benefit/deduction enrollments field, select a benefit/deduction enrollment from the Benefit/deduction enrollments table, if applicable. 7. In the Employer calculation field, select the appropriate calculation from the Calculations table for the employer part of the benefit/deduction, if applicable.
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Microsoft Dynamics® AX Payroll 8. In the Employee calculation field, select the appropriate calculation from the Calculations table for the employee part of the benefit/deduction, if applicable. 9. Click Insert to create the new calculation combinations in the table. To delete specific calculation combinations from the table, select them and click Delete.
Procedure: Schedule Pay Period Benefit/Deductions You must schedule each benefit/deduction for the specific pay periods in which it will calculate, or no calculations will perform. This means that a schedule must be established for each: •
benefit/deduction in a pay group
•
benefit/deduction rule group combination
An example is shown in the following table: Pay group
Benefit/deduction rule group
Benefit/deduction
Periods
Staff
Assembly
Union dues
2006-01 2006-02 2006-03...
Staff
Assembly
Health plan
2006-02 2006-04 2006-06...
You can use benefit/deduction groups to simplify data entry when scheduling benefit/deductions. A user may choose to create a benefit/deduction group called "regular payments" that then can be scheduled for every regular pay period. Users can do this by finding the Setup area in the Payroll area page, clicking Benefit/deductions, and then clicking Benefit/deduction groups. After the benefit/deduction group is scheduled, any new benefit/deductions that are added to the group will be scheduled automatically. Follow these steps to schedule a single benefit/deduction. 1. In the Payroll area page, find the Schedules area and click Pay Period Benefit/Deductions. 2. Press CTRL+N to create a new pay period benefit/deduction combination, and then select the General tab. 3. In the Pay group field, select the benefit/deduction rule group from the Pay groups table. 4. In the Pay group active date field, select the first date when this pay period benefit/deduction combination takes effect.
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Chapter 10: Set Up Benefit/Deductions 5. In the Benefit/deduction rule group field, select the applicable benefit/deduction rule group from the Benefit/deduction rule groups table. 6. In the Benefit/deduction field, select the benefit/deduction code from the Benefit/deductions table. 7. In the Benefit/deduction group field, select a benefit/deduction group from the Benefit/deduction groups table, if applicable. 8. In the Pay period end date field, select the final date when this pay period benefit/deduction combination will be applied. Use this procedure to schedule multiple benefit/deductions: 1. In the Payroll area page, find the Schedules area and click Pay Period Benefit/Deductions. 2. Press CTRL+N to create a new pay period benefit/deduction combination, and then select the Fast Entry tab. 3. In the Pay groups field, select one, many, or all entries from the Pay groups table. 4. In the Date period field, select a date period code from the Date periods table to automatically display a list of the appropriate pay period end dates. 5. In the Pay period end dates field, select one, many, or all pay period end dates when this combination will apply. 6. In the Benefit/deduction rule groups field, select one, many, or all entries from the Benefit/deduction rule groups table. 7. In the Benefit/deductions field, select one, many, or all entries from the Benefit/deductions table. 8. In the Benefit/deduction groups field, select one, many, or all entries from the Benefit/deduction groups table, if applicable. 9. Click Insert to create the new calculation combinations in the table. To delete specific calculation combinations from the table, select them and click Delete.
Statutory Deduction Setup Processes Recall that the term "Statutory Deduction" refers to all benefit/deductions that are governmentally and/or legally required, such as taxes and Medicare. In some areas, pre-defined statutory benefit/deductions (and their associated calculations and accumulators) may be available for upload into the Payroll module. Otherwise, implementers must set them up. Statutory deductions also can be imported. For a payroll administrator to be able to process statutory deductions for a jurisdiction, the system-defined deductions, calculations, and accumulators for that jurisdiction must be set up properly. This section provides the general process for setting them up. Detailed procedures are available at Partner Source.
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Microsoft Dynamics® AX Payroll The following process assumes that you: •
already know how to set up job filters, benefit/deductions, benefit/deduction groups, benefit/deduction rule groups, and accumulators.
•
use job filters to manage your jurisdictions.
•
use benefit/deduction groups to associate statutory benefit/deductions with accumulators and payment schedules.
•
have created separate benefit/deduction rule groups for each tax jurisdiction that you use.
Process: Set Up Statutory Deduction Environment Use this process to plan and set up the conditions you need to support your statutory deductions. 1. Set up job filters to control which employees are subject to the statutory deductions that you are adding. 2. Specify which accumulators apply to which employees (accumulator eligibility ), and which earnings or benefits contribute to each accumulator (accumulator values ). Recall that accumulators track employee-specific amounts, such as: • the earning amounts that qualify for statutory deductions •
which benefits reduce taxable earnings
•
the amount employees have paid
3. Set up calculations to provide for the rates necessary in your jurisdiction. 4. If you are going to use benefit/deduction groups to help manage your benefit/deductions, then add the new benefit/deductions (corresponding to the statutory deductions required in the jurisdiction) to the appropriate groups. 5. If you must work with different jurisdictions, set up benefit/deduction rule groups for each jurisdiction. You may need more than one benefit/deduction rule group for each jurisdiction if different groups of employees in a jurisdiction have different sets of benefit/deductions. 6. If required, set up benefit deduction enrollments. Some statutory deductions require benefit/deduction enrollments, such as Married and Single, which you use to select the appropriate variant of a benefit/deduction calculation.
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Chapter 10: Set Up Benefit/Deductions Process: Set Up the Statutory Deductions There are two possible processes to use when you set up statutory deductions. •
Unless you can import statutory deductions, you must create them. Use the procedure for setting up benefit/deductions, provided earlier in this course.
•
Set up benefit/deduction rule group calculations for each statutory deduction. Ensure you specify which benefit/deductions and enrollments belong to it, and which employee and employer calculations are used for each.
Process: Schedule and Assign the Statutory Deductions Use this process to schedule and assign statutory deductions. 1. Schedule the statutory deductions, so you can apply them to payments. 2. Assign the statutory deduction using the Employee form, where you also will select the calculation to use. If the new jurisdiction affects many employees, you can click Mass benefits and deductions insert in the Functions menu on the Employees form to accomplish this quickly. 3. If you have integrated Payroll to the Project module, then post Payroll expenses to Project journals.
Summary Well-planned, accurate, and efficiently set up benefit/deductions are one of the keystones of a successful implementation. Well-designed benefit/deductions can save time and resources for both the implementation team and the end users.
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Microsoft Dynamics速 AX Payroll
Test Your Knowledge 1. Benefit/deduction enrollment codes should be created: ( ) after benefit/deduction codes. ( ) before benefit/deduction groups. ( ) before benefit/deduction codes. ( ) before benefit/deduction types. 2. Benefit/deduction types are optional, and are used for what purposes?
3. Choose the feature for which this statement is true: at least one of these must be set up for each company. ( ) Benefit/deduction enrollment code ( ) Benefit/deduction rule group ( ) Benefit/deduction rule group calculation ( ) Benefit/deduction group 4. Some benefit/deduction calculations use specific benefit/deduction accumulators. Which two of the following statements combine to accurately describe when these accumulators should be created? (Select all that apply) ( ) Create these accumulators after benefit/deduction rule groups. ( ) Create these accumulators before benefit/deduction rule groups. ( ) Create these accumulators after benefit/ deduction calculations. ( ) Create these accumulators before benefit/ deduction calculations. 5. True or false: most benefit/deductions will need to must use specific benefit/deduction calculations. (Select all that apply) ( ) True ( ) False
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Chapter 10: Set Up Benefit/Deductions 6. Answer these three scheduling-related questions: •
What basic purpose do benefit/deduction groups serve for payroll administrators?
•
What happens if you do not schedule each benefit/deduction for specific pay periods?
•
How does a benefit/deduction group serve the purpose referred to above?
7. Where are calculations associated with benefit/deductions? ( ) In the Benefit/deduction rule group calculations form. ( ) In the Benefit/deduction rule group form. ( ) In the Benefit/deduction calculation form. ( ) In the Benefit/deduction group form.
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10-19
Microsoft Dynamics速 AX Payroll
Lab 10.1 This provides an opportunity to practice the procedures for setting up benefit/deductions in the Payroll module. Scenario Contoso is going to offer employees interest-free loans towards purchasing a computer. The repayments will be withheld from employee paychecks. Mia must set up the loan repayment deduction.
Challenge Yourself! Set up Payroll to withhold loan repayments from the paychecks of employees who have an outstanding loan. You must track the amount that was loaned to an employee and the amount that should be withheld from each paycheck. Ensure that the deduction will stop when the loan is fully repaid. Use ledger account 211700 for this deduction. Ensure that the active date for the benefit/deduction, calculation, and calculation variables are earlier than the date that you start using this benefit/deduction.
Need a Little Help? Because the amount that is being loaned and the amount that will be withheld on each paycheck are employee-specific, you must create two calculation variables, loan amount and loan recovery amount, to track these amounts for each employee who takes a loan. You need an accumulator, loan recovery total, to track how much has been deducted so far. To ensure deductions stop when the loan is repaid, use the MIN function in your calculation to take either the loan recovery amount or the loan amount less the accumulated amount taken so far, whichever is less. Associate your benefit/deduction with benefit/deduction groups to manage the schedule when it is deducted ("Apply every pay period" group) and the payment types it is deducted on ("Apply reg pmt only"). You can associate your loan benefit/deduction and its calculation with every benefit/deduction rule group because this offer is available to all staff. That means that it will be calculated for every employee, but the deduction will be taken from only those employees who have the loan amount and loan recovery amount calculation variables. Alternatively, you can leave the loan recovery benefit out of all your benefit/deduction rule groups. Most employees will not have that benefit/deduction. Whenever a loan recovery does need to be set up, the Payroll clerk will need to add it and select the calculation, as well as set up the two loan calculation variables for that employee.
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Chapter 10: Set Up Benefit/Deductions Step by Step First, create the benefit/deduction. 1. In the Payroll area page, click Benefit/deductions in the Setup area and click Benefit/deductions. Press CTRL+N to create a new row, and then click the General tab. 2. Give your benefit/deduction a name, short code, and description. 3. Because this benefit/deduction is not dependent upon any other benefit/deduction calculations, give it the lowest calculation sequence number, 1. If it were dependent upon another benefit/deduction calculation, it would need to have a number higher than the benefit/deduction from which it was calculated. 4. Give this benefit/deduction a depletion sequence number that reflects its priority in the situation where the payment is not large enough to cover all the employee deductions. The benefit/deductions with the lowest numbers will be taken first. 5. From the Insufficient funds menu , select how you want this deduction handled when there are not enough earnings to withhold the full deduction amount. For the loan recovery, take what is available and ignore the rest. That means that if the deduction should be $100.00, but only $54.00 of earnings remain, the system will withhold the $54.00 and count it toward the loan repayment, and in the next pay period, it will withhold the usual $100.00. 6. Select No for Prepaid allowed because any amount paid would apply to the loan immediately, rather than hold it as a pre-payment to apply in the future. 7. Select No for benefit. 8. Select No for Apportion because the amount should not be scaled down if the benefit becomes active or inactive partway through a pay period. 9. Select the date, relative to the pay period when the deduction is taken, that the deduction transaction should be recorded for. 10. Select Yes for Print on statements. 11. Enter a description that will appear on employee payment statements. 12. Enter a statement sequence number. Benefit/deductions with low numbers print before benefit/deductions with high numbers. Benefit/deductions sharing the same number will be grouped together. 13. If this benefit/deduction had an employer contribution, the Print employer amount selection would determine whether this benefit/deduction was listed in the benefits section of the employee payment statement.
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Microsoft Dynamics® AX Payroll 14. Select account 211700 for the employee debit and credit account. Leave the dimensions and employee AP vendor blank. 15. Set the active date to 1/1/2000. 16. Close the form. Use benefit/deduction groups to schedule this benefit, determine the payment types that it applies to, and the accumulators it populates. 1. In the Payroll area page, click Benefit/deductions in the Setup area and click Benefit/deduction groups. 2. Click the Overview tab and review the list of groups to decide which groups the new benefit/deduction belongs in. This benefit/deduction belongs in: • All deductions •
Apply every pay pd
•
Apply reg pmt only
3. For each group that it belongs in, select the group, click the Benefit/deduction group benefit deductions tab, select the new benefit/deduction in the Benefit deductions remaining list and click the arrow to add it to the Benefit deductions selected list. 4. After you have added the deduction to all three groups, close the window. Because the amount that is being loaned and the amount that will be withheld on each paycheck are employee-specific, you must create two calculation variables, loan amount and loan recovery amount, to track these amounts for each employee who takes a loan. 1. In the Payroll area page, click Calculations in the Setup area and click Calculation variables. 2. Press CTRL+N and create a calculation variable named Loan amount with an Active date of 1/1/2006. 3. Click the Setup button and choose Calculation variable items. 4. Press CTRL+N to create a new calculation variable item. Name it Loan amount. Leave the item amount and item rate at zero. Close the Calculation variable item form. 5. In the Calculation variable form, press CTRL+N and create a calculation variable named Loan recovery amount with an Active date of 1/1/2006. 6. Click the Setup button and choose Calculation variable items. 7. Press CTRL+N to create a new calculation variable item. Name it Loan recovery amount. Leave the item amount and item rate at zero. Close the Calculation variable item form and the Calculation variable form.
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Chapter 10: Set Up Benefit/Deductions Next, you need an accumulator to track how much of the loan has been repaid. 1. In the Payroll area page, click Accumulators in the Setup area, and then click Accumulators. 2. Press CTRL+N and click the General tab. 3. Enter Loan recovery total as the accumulator name. 4. Select the ongoing date period, the employee level accumulator type and the employee deduction accumulator unit type. 5. The Date period type field is used to determine which date in the pay period the system should use when deciding which date period's accumulator to update. Because this accumulator is ongoing, it has only one date period - so this field is not relevant to this accumulator. If this accumulator were a monthly accumulator, and you selected the statement date as the date period type, then: an amount that was in a pay period that ended in one month, but had a statement date in the next month, would be added to the accumulator for that second month. 6. Select Full amount for the Read type. When a calculation reads in the value of this accumulator, it will read in the full amount, not just the amount that has not been processed yet. 7. Select No for Prior period and Print on statements. 8. Set the active date to 1/1/2006. 9. Click the Setup button and select Accumulator eligibility. 10. Click the Fast entry tab, select Loan recovery total from the Accumulators list, and select all the pay groups, and then click Insert. Do not select any organization units, occupations, position types, position assignment types, or position filters unless you have a specific need to filter by that field. 11. Close the form. 12. In the Accumulators form with Loan recovery total still selected, click the Setup button and select Accumulator values. 13. Click the Fast entry tab and select your loan recovery benefit/deduction. Leave the Factor amount set to 1.00 and click Insert. Close the Accumulator values form and the Accumulators form. The next step is to create your calculation. The calculation will subtract the loan recovery total accumulator from the loan amount calculation variable to determine the amount left to recover. It will compare that amount to the loan recovery amount calculation variable and take whichever is less. Most of the time, that will be the employee's loan recovery amount. If, however, the amount remaining to be recovered is less than the loan recovery amount, the deduction will be the amount remaining to be recovered. After the full amount has been recovered, the amount remaining to be recovered always will be zero, and the deduction will not be taken.
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10-23
Microsoft Dynamics速 AX Payroll The calculation you need is: MIN(Loan recovery amount, (Loan amount-Loan recovery total)) 1. In the Payroll area page, click Calculations in the Setup area and then click Calculations. 2. Press CTRL+N. Call the new calculation Loan recovery. 3. Click the Rule tab, and then click the Edit button. 4. Clear the 0.00 from the Calculation string field, and then click the MIN button. 5. Select Loan recovery amount from the Calculation variable menu and click Add operand. 6. Click the , button, and then click the ( button. 7. Select Loan amount from the Calculation variable menu and click Add operand. 8. Click the - button. 9. Select Loan recovery total from the Accumulator menu and click Add operand. 10. Click the ) button twice. 11. Click the Validate button to confirm that the calculation is mechanically valid. Close the confirmation dialog. 12. Click the Test button to confirm that the calculation produces the results you expect. In the test form, enter a loan amount of 500, a loan recovery total of 100 and a loan recovery amount of 50, and then click Calculate. The result should be a deduction of 50. Change the loan recovery total to 490 and click Calculate. The result should be a deduction of 10. 13. Close the Calculation test form. 14. Click Save in the Calculation Edit form, then close the Calculation form. Now you can set up your benefit/deduction rule group calculations, if you want to have this benefit/deduction listed for all employees, but not withholding anything until your payroll user sets up the loan calculation variables. Your benefit/deduction rule groups already exist. You just need to create benefit/deduction rule group calculations that tie the benefit deduction and calculation to each rule group. 1. In the Payroll area page, click Benefit/deductions in the Setup area, and then click Benefit/deduction rule groups. 2. Click CTRL+N. Select a benefit/deduction rule group, select the Loan recovery benefit/deduction, and select Loan recovery as the employee calculation. 3. Repeat step 2 for each benefit/deduction rule group.
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Chapter 10: Set Up Benefit/Deductions Now you are ready to test your benefit/deduction setup. 1. Click Payroll, and then click Employees. (You can also work from the Employees list in the Basic or Human Resources modules). 2. Select employee 1077, Brynja Blomsterberg, click the Payroll Profile tab, and click the Benefit/deductions action button. 3. In the Employee benefit/deductions form, click CTRL+N. 4. Select the Loan repayment benefit deduction. If you set up the benefit/deduction rule group calculation, the calculation appears automatically. Otherwise, select Loan recovery as the employee calculation. Select the Staff-USA pay group and set the active date to1/1/2008. Close the Benefit/deduction form. 5. In the employee list action pane, click the Manage button, and then select Calculation variables. 6. In the Calculation variables form, press CTRL+N to create a new row. Select the Loan amount calculation variable and the Loan amount item. Enter the amount of the loan in the override amount/rate column. Make the Active date 1/1/2008. 7. Press CTRL+N again and select the Loan recovery amount calculation variable and the Loan recovery amount Item. Enter the amount of the recovery deduction in the override amount/rate column. Make the Active date 1/1/2008. 8. Close the Calculation variables form. 9. In the Payroll area page, click Manual payments in the Journals area. 10. Select the Staff-USA pay group and employee 1077, Brynja Blomsterberg. Select the Regular payment type and the Check payment method. 11. On the Time tab, click Generate earnings. On the earnings tab, click Calculate payment. On the Benefit/deductions tab, you will see the loan repayment deduction using the amount that you specified as the loan recovery amount.
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Microsoft Dynamics速 AX Payroll
Quick Interaction: Lessons Learned Take a moment and write down three key points you have learned from this chapter 1.
2.
3.
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Microsoft Official Training Materials for Microsoft Dynamics 速 Your use of this content is subject to your current services agreement
Chapter 10: Set Up Benefit/Deductions
Solutions Test Your Knowledge 1. Benefit/deduction enrollment codes should be created: ( ) after benefit/deduction codes. ( ) before benefit/deduction groups. (•) before benefit/deduction codes. ( ) before benefit/deduction types. 2. Benefit/deduction types are optional, and are used for what purposes? MODEL ANSWER: Benefit/deduction types are used for classification and reporting purposes only. For example, you can use benefit/deduction types can be used to classify benefit/deductions as either mandatory or optional. 3. Choose the feature for which this statement is true: at least one of these must be set up for each company. ( ) Benefit/deduction enrollment code (•) Benefit/deduction rule group ( ) Benefit/deduction rule group calculation ( ) Benefit/deduction group 4. Some benefit/deduction calculations use specific benefit/deduction accumulators. Which two of the following statements combine to accurately describe when these accumulators should be created? (Select all that apply) (√) Create these accumulators after benefit/deduction rule groups ( ) Create these accumulators before benefit/deduction rule groups ( ) Create these accumulators after benefit/ deduction calculations (√) Create these accumulators before benefit/ deduction calculations 5. True or false: most benefit/deductions will need to must use specific benefit/deduction calculations. (Select all that apply) (√) True ( ) False
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10-27
Microsoft Dynamics® AX Payroll 6. Answer these three scheduling-related questions: •
What basic purpose do benefit/deduction groups serve for payroll administrators?
•
What happens if you do not schedule each benefit/deduction for specific pay periods?
•
How does a benefit/deduction group serve the purpose referred to above?
MODEL ANSWER: You can use Benefit/deduction groups can be used to simplify data entry when scheduling benefit/deductions. You must schedule each benefit/deduction for the specific pay periods in whichwhen it will be calculated, or no calculations will be performed. Once the benefit/deduction group is scheduled, any new benefit/deductions that are added to the group will be automatically scheduled automatically. 7. Where are calculations associated with benefit/deductions? (•) In the Benefit/deduction rule group calculations form. ( ) In the Benefit/deduction rule group form. ( ) In the Benefit/deduction calculation form. ( ) In the Benefit/deduction group form.
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Microsoft Official Training Materials for Microsoft Dynamics ® Your use of this content is subject to your current services agreement