Skip to content
logo Knowledgebase

Sage HRMS third party sick pay

Created on  | Last modified on 

Summary

The third party provider does not provide an employee W-2.

Description

Cause

Resolution

CAUTION: Use caution when working with the below product functionality. Always create a backup of your data before proceeding with advanced solutions. If necessary, seek the assistance of a qualified Sage business partner, network administrator, or Sage customer support analyst.

From the Navigation Pane, select Setup, Payroll, Earnings/Deduction Codes, and click 'Add' to setup a Non-Cash Benefit Earning

Select the following upon each tab:

Basic Info Tab

Category: Benefit

  • Type: Noncash
  • Employer Calculation Method: Flat
  • Frequency: Your employees frequency or float (Float will adopt the employee frequency)

Employer Tab:

  • W2 Reporting: Sick Pay Not Includible as Income (3rd Party Sick Pay)
  • Enter the taxes subject to the earning

GL Tab: No setup is needed as the benefit is not employer paid

Add the earning to all employees with the benefit upon the pay tab detail as detailed below

Navigate to: Employees,View/Edit Employee, select the employee needing third party sick pay

  • Select Payroll, Employee Payroll
  • Select the Pay Tab
  • Select the Insert Key and select the earning code and select 'Save'

How to pay the earning: Enter the pay upon the employees timecard or manually within 'Transaction History'

  • Timecard Entries: The system will calculate the taxes
  • Transaction history: Generally, 'US Federal Income Tax' will not be added to this transaction. Only the employee's 'USMED' and 'USSS' tax codes will be affected.

When adding the taxes there are two fields that need to be completed:

  • Employee Extended Amount: This the amount the Third party provider paid on behalf of the employee
  • Employer Extended Amount: This amount is the same, but for the employer.

Ceiling Wage/No Ceiling Wage: These are conditional fields, the values entered here will depend upon the wage cap of the tax base.

  • In the case of USMED: The amount of money paid to the employee is entered in the 'No Ceiling Wage' field.
  • In the case of USSS: The amount paid to the employee is entered in the 'Ceiling Wage' field.

Proper tax recording is important as it is these fields which determine correct values upon the 941 at quarter-end.

  • The 941 will show a fractional value which is normal when third party sick pay has been entered.
  • Line 8 is designed/utilized to adjust the fraction. Enter the employer portion of the taxes upon this line to lower the fractional value.

Chat with support