Third-Party Sick Pay
Pen and Paper Adjustment
Enter Manual Checks into Spectrum
Use payroll checks to record the tax liabilities:
- Select .
- Set up a third-party sick pay worker's compensation code for any state involved in third-party sick pay.Note: This does not include sick pay in the workers' compensation calculation; the tax rate for this workers' compensation code would be zero.
- Select .
- Set up a third-party sick pay department.
- Select G/L Codes tab and change the cash G/L account code to the clearing account used in the Third-Party Sick Pay payroll department. , select the
- If Cash Management module is present, on the Bank Accounts and deselect the option to post payroll transactions. screen, select
- Set up a separate pay cycle to record third-party sick pay checks using the applicable period end and check dates. Make sure the Automatic cycle and accrue hourly banks are cleared, select Turn off auto deposit payments.
- Select the Suppress all in the Recurring deductions and add-ons checkbox.
- Enter Manual Check time cards for only third-party sick pay in this pay cycle using the 'SA' pay type, the Third-Party Sick Pay Department and entering the gross amount of the pay. If the employee belongs to a union, remove the wage code and union from the time card file.Note: If you are already using the SA pay type for another purpose, please use the Other 1, 2, or 3 pay type instead. To see the Description setup for these, go to tab.
- Calculate the pay cycle.
- Use Check Adjustment Entry to zero out employee-paid withholdings and deductions and select Save.
- Return to Calculation Reports and review the State Wage and Tax Listing to verify that only employer-paid FICA, FUTA, SUTA, and other local taxes that are subject to sick leave have been accrued and that all employee-paid withholding is zero. Archive reports for your records.
- Update the pay cycle as you normally would.
- Return to the Payroll Installation screen to change the cash account back to the cash G/L account code.
- Turn the Cash Management module back on (if you turned it off in step 6).
- Enter a journal entry to move the total of the employers' FICA amount to the clearing account. An alternative to this entry is to change the employer FICA G/L account code in Tax Table File Maintenance, and then change it back after this payroll cycle is updated.
How do I produce a separate W-2 for third-party sick pay?
You can use the existing W-2 to report the third-party sick pay by editing the existing W-2 for this employee in the W-2 Form Maintenance screen and adding the amounts to the appropriate boxes to report the third-party sick pay.
- Add the additional W-2 to report third-part sick pay separately from regular wages in the W-2 Form Maintenance screen with an employee code that is different from the existing Spectrum employee code.
- Leave the Form ID field blank.
- Continue entering amounts in the applicable boxes of the W-2 to report the third-party sick pay. By using a different employee code, the blank Form ID field will allow this extra W-2 to be written to the W2REPORT file, which is created when you select the Electronic button.