21st Century Accounting Help - Payroll/Configure

Vacation and Sick Accruals

Use the Payroll/Configure/Vacation and Sick Accruals window to set up any number of factors for handling vacation and sick accruals. The 21st Century Accounting shorthand term for all types of accruals is "pay factors."

Configuring Vacation and Sick Accruals

You set up vacation factors, for which you indicate the methods and you can enter the rates (hours per pay period or percent of hours worked per pay period) for accruing vacation time.

You set up sick time factors, for which you indicate the methods and you can enter the rates (hours per pay period or percent of hours worked per pay period) for accruing sick time.

If you do not want to track accrued vacation or sick hours, but you do want to expense vacation and sick payouts separately from regular pay, you can simply set up an income factor for the payout and ignore the Accruals window.

Tracking Accruals Taken

Employees accrue vacation and sick time at the rate of the factors assigned to them. Then when an employee takes vacation or sick time, you can enter the hours taken in the “Hours paid” field and, optionally in the accrual’s payout field, the amount paid for those hours, when you process Payroll. The system reduces the available accrual by the hours taken.

Automatic Payout Field

The system automatically displays an accrual payout field when you run Calculate or ATF Payroll for the employee to whom the accrual factor is assigned. You assign a vacation or sick pay expense account for use by the payout and then you enter the vacation or sick pay amount paid (or have the system calculate the amount) when you process Payroll.

In the Configure/Company Information window, you can select the option to "Auto-calculate accrual pay amount." Check this box to make the system calculate the dollar amount paid when you enter the number of vacation and sick hours paid in the Calculate or ATF Payroll window.

When you configure an accrual factor as subject to US FIT, US Med, US SS, SIT, and/or any user-defined (local) taxes, the payouts will be included in those taxable earnings boxes on the W-2. If you configure an accrual factor as not subject to taxes, it will not appear anywhere on the W-2. Accrual payouts are normally subject to the same taxes as any other income.

If you do not want to track vacation or sick time paid out, simply ignore the associated vacation and sick payout field in the Payroll window.

Assigning vacation and sick accruals to employees

You can auto assign an accrual to all employees entered subsequently when you configure the accrual. You can also assign accruals to (and remove them from) selected employees in the Payroll/Configure/Employees window, where you also customize accruals for individual employees, if necessary. Choose whether accruals are set to zero or will carry over at the end of the year in Payroll/Configure/Company Information.

Posting accruals

The system calculates accrued hours when you process Payroll for the employee. You enter hours taken and, optionally, vacation and sick payout amounts when you process Payroll.

Manual pay distribution

If you did not check the option in the accruals window to "Allow manual distribution of this factor," when you enter vacation and sick payouts, the system posts the amounts paid out to the general ledger accounts assigned to the vacation and sick accruals.

If you did check the option in the accruals window to "Allow manual distribution of this factor," when you enter vacation and sick payouts, the system adds the accrual payouts to the earnings amount you can distribute manually.

Departmentalization

If you select the option for departmentalization by G/L account segment in Payroll/Configure/Company Information, the expense accounts you assign to vacation and sick accruals are the "default" posting accounts for accrual payouts. You then have the option to departmentalize each factor (or not). When you actually post paychecks using departmentalization, the system substitutes each employee's assigned department value for the department segment value in each factor's default account and posts expenses and liabilities for each employee to the accounts that are based on the employee's assigned departments.

Vacation and sick hours accrued are not posted to the general ledger. If you select the option to departmentalize an accrual, the system associates the hours generated by the accrual with the employee's department(s).