PAYROLL-CONTRACT PAYROLLS EARLY PAYMENTS END OF FISCAL YEAR

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Contents



What This Process Does


  • Provides direction on issuing early payments for the summer months for contract employees, while ensuring the expense is placed in the appropriate fiscal year
  • Explains pay master setup for early payments, and explains different setup required in case of reporting needs


Best Practices


  • It is common for schools to process the payroll for their less-than-12-month contract employees early for July and August (paying the balance of their contract for the previous fiscal year). In order to ensure the correct fiscal year for the expense, and report correct wages in their contract year, it is crucial to use the correct calendar and fiscal periods when processing these payrolls.
  • OpenRDA has 14 fiscal processing periods: Pre Year=0, January to December=1 through 12, and Post Year=13. Post Year is recommended to be used as the fiscal month for the early July/August payrolls as a means to distinguish/separate the expense for those payrolls from the actual expenses for the last month of the fiscal year (June).
  • Depending on reporting needs, such as North Dakota Retirement, where all wages in the contract year must be reported in one file, there could be different scenarios for fiscal and calendar year setup in the Pay Master.
  • Defining meaningful Pay Groups, and assigning them to the appropriate jobs, plays an important role, especially in school systems, when payrolls only need to be run for a certain group of employees for the July and August payments that need to be expensed in the previous Fiscal Year (for example, 10 and 11-month employees in July, and 10-month employees only in August).
  • To help determine how the calendar and fiscal periods should be set on the Pay Master, remember that calendar periods are determined by the date of the checks/direct deposits and when taxes are due, while fiscal periods are determined based on when the expense should occur in Financial Management.
  • Important Note: Make sure to run the Open Financial Year process in Financial Management before running a payroll with a Pay Date in the new fiscal year


Pay Master Setup Example 1


  • Post Year is recommended to use as the Fiscal Month for July and August payrolls when there is not a concern about state reporting, such as with ND Retirement.
  • Wages and deductions will be applied to the current Calendar Year and Calendar Month July (or August if Calendar month is August).
  • Expenses will be applied to the previous Fiscal Year and Fiscal Month Post Year.
  • Post Year is its own Financial Period, the last of the Fiscal Year (month 13).
  • Expenses are separated in the Post Year month but still applied to previous Fiscal year.


FIELDS Opt. Rec. Req. Description
Pay ID
Enter Pay Identification using standard format Fiscal Year-Fiscal Month: MM/DD/YY of actual check date
Description
Enter Description for the Payroll
Pay Date
Enter actual pay date for the payroll; If payroll is to pay July or August then pay date should reflect those months
Start Date
Enter start date of the pay period
Ending Date
Enter ending date of the pay period
Number of Days
Number of days will default once start and ending date are populated
Pay Type
Enter appropriate Pay Type
Calendar Year
Enter current calendar year
Calendar Month
Enter month that agrees with the check date: If the check date is in July, the calendar month should be July and same with August
Fiscal Year
Enter the fiscal year in which the expense should occur; If expense should be in previous fiscal year then enter previous fiscal year
Fiscal Month
Enter the month in which the expense should occur; Using Post Year is recommended for fiscal month
Opt. = Optional  Rec. = Recommended  Req. = Required


Pay Master Setup Example 2


  • Some states require reporting all contract pay in the same fiscal month, including the early payments for July and August, combined in one file for the last fiscal month of the fiscal year (not using Post Year for a fiscal month).
  • When reports pull data by Fiscal Month such as North Dakota Retirement for example, June, July and August must have the same Fiscal Month and Fiscal Year in order to include all three months in the same file.
  • June would be set up no differently since it's in the current Fiscal Year (Calendar Month June and Fiscal Month June).
  • Wages and deductions will be applied to the current Calendar Year and Calendar Month July (or August if Calendar month is August).
  • Expenses will be applied to previous Fiscal Year and Fiscal Month June.
  • This set up allows you to run any expense reports for the Fiscal Month of June and will include all three payrolls for the months of June, July and August in the report.


FIELDS Opt. Rec. Req. Description
Pay ID
Enter Pay Identification using standard format Fiscal Year-Fiscal Month: MM/DD/YY of actual check date
Description
Enter Description for the Payroll
Pay Date
Enter actual pay date for the payroll; If payroll is to pay July or August then pay date should reflect those months
Start Date
Enter start date of the pay period
Ending Date
Enter ending date of the pay period
Number of Days
Number of days will default once start and ending date are populated
Pay Type
Enter appropriate Pay Type
Calendar Year
Enter current calendar year
Calendar Month
Enter month that agrees with the check date: If the check date is in July, the calendar month should be July and same with August
Fiscal Year
Enter the fiscal year in which the expense should occur; If expense should be in previous fiscal year then enter previous fiscal year
Fiscal Month
Enter the month in which the expense should occur; In this example, June is recommended for fiscal month
Opt. = Optional  Rec. = Recommended  Req. = Required


  • With both example scenarios, the checks/direct deposits for the early payrolls would be dated (and released to the employees) in July and August. The tax liability would also be in July and August for 3rd Quarter reporting.
  • When adding Vendor Withholding vouchers for the July and August payrolls, the calendar and fiscal periods should agree with when the payments are dated.
  • Checks/EFTs with a calendar month of June should have the fiscal month of June and the appropriate fiscal year for June.
  • Checks/EFTs with calendar month of July or August should have the fiscal month of July or August and the appropriate fiscal year for July or August.
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