Payroll

The Payroll processing is an optional module. Your software will not have the ability to process payroll unless you have purchased this module. If you did not purchase it then you may not be able to see this tab in the preferences. Contact SherWare Support if you are interested in adding this capability.

The setup on this window must be completed before the payroll module will be able to calculate each employee's pay.

Unemployment Settings

Calculate SUTA Tax
Check this box if you want the system to calculate and keep track of the State Unemployment Tax for each employee. The tax will be based on the state that the employee has a state withholding tax for. The state that they have withholding for is specified in the taxes tab of each employee's record. When this option is marked the tax will be calculated on each employee and posted to the liability account given for the particular state on the payroll taxes window. The state withholding tax may have to be setup as a payroll taxes if it is not already.

Calculate FUTA Tax
Mark this box if you want the system to calculate and keep track of the Federal Unemployment Tax. If this box is not checked the FUTA tax will have to be manually calculated.

FUTA Rate & FUTA Limit
The Federal Unemployment Tax Act imposes a payroll tax on employers, based on the wages they pay to their employees. If you don't withhold the FUTA tax from an employee's wages, then the business itself must pay this tax.

You must pay the FUTA tax if during the current or the preceding calendar year you meet either of the following tests:

You pay wages totaling at least $1,500 to your employees in any calendar quarter, or

You have at least one employee on any given day in each of 20 different calendar weeks (the 20 weeks need not be consecutive and the "one employee" need not be the same individual).

The FUTA tax is imposed at a single flat rate on the first $7,000 of wages that you pay each employee. Once an employee's wages for the calendar year exceed $7,000, you have no further FUTA liability for that employee for the year.

The FUTA rate is a flat 6.2 percent. However, you can generally claim credits against your gross FUTA tax to reflect the state unemployment taxes (SUTA) you pay. If you paid all your state unemployment taxes on time, and before the due date of your FUTA tax return, you'll be allowed to claim a credit equal to 5.4 percent of your federally taxable wages. This will effectively reduce the FUTA tax rate to 0.8 percent. This should be entered as a whole percentage. Example: .8% should be entered as 0.800.

FUTA Liability Account
Enter the account used to track FUTA tax liability. This account can be chosen from the chart of accounts list by typing it in, pressing the F2 key or by clicking on the account lookup button.

Expense Account
Enter the account used to track FUTA Expenses. This account can be chosen from the chart of accounts list by typing it in, pressing the F2 key or by clicking on the account lookup button.

Default Accounts

Payroll Checking
Enter the account number for the checking account to be used for printing the payroll checks. This is the account from which the payroll checks will be deducted.

Payroll Expense
Enter the account number for the default expense account to use for the employee's gross wages. The gross wages of each employee is an expense to your company and should be posted to an expense account. Each employee can have his or her gross wages posted to a different expense account. To do this, enter the expense account in each employee's record using Maintain, Employees. If no expense account is entered in the employee record, the system will default to use this account for payroll expenses.

Bonus Expense
Enter the account number for the account to be used for employee bonus checks. This is the default account to which all bonus checks will be posted. A different bonus account can be specified for each employee using Maintain, Employees. If no bonus account is specified in the employee record, the system will default to use this account for bonus checks.