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HR/Payroll Accounting

HR/Payroll Accounting. VPF Learning Series April 16 th , 2010 . Presentation Outline. Who are we? What do we do? Pay people and post salary/wage expenses Collect and remit taxes Collect and remit/distribute deductions Provide tax reports Employees Institute Reconciliations.

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HR/Payroll Accounting

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  1. HR/Payroll Accounting VPF Learning Series April 16th, 2010

  2. Presentation Outline • Who are we? • What do we do? • Pay people and post salary/wage expenses • Collect and remit taxes • Collect and remit/distribute deductions • Provide tax reports • Employees • Institute • Reconciliations

  3. Organization Chart

  4. What We Do • Pay people • Issue Tax Forms (i.e. W-2s) • Customer Service – Ticket Queue and phone • Off-Cycle Check Processing & Posting • Timesheet Corrections • Vacation Processing & Research • Benefits Support • Payroll Processing • Pension Payroll • Salary Distribution & Issues Resolution • Salary Overpayment Claims Processing • Long Term Disability/ SSDI overpayment Claims • Remittance (Tax, Garnishments, Dues, 401(k), Home/Auto, etc) • Sick Buy-Back Processing • Jury duty Pay Processing • Military Differential Processing • Swiss Francs Pay • Tax Inquiries • Year End Reconciliation • Reporting & Documentation • Garnishment and Levy Setup • Tax Filing • Late Distribution Change Processing • Taxable Travel Processing • Workers’ Comp Setup • Account Reconciliation

  5. What We Do

  6. Salary and Wages

  7. Salary and Wages - Statistics Active Employees • $1.08 billion/year • 4,000 weekly paid employees • 12,500 monthly paid employees • 357 different pay categories • Direct deposit – 97% Pensioners • $104 million/year • 5,600 pensioners • Direct deposit – 91%

  8. Salary and Wages - Posting Payroll Runs (and posting) • Weekly paid employees - 52 times a year • Monthly paid employees - 12 times a year • Off-cycle payroll runs – 1,800/year • Late Paperwork • Terminations • Awards What this means • 1,864 payroll postings/year • ~155 posting/month • ~7 posting/day • Off-Cycle Issues • Unstable posting • Manual process

  9. Salary and Wages - Distribution Distribute to 4,600 accounts Weekly – post weekly • Paid – Posted/Distributed Monthly and Supplements – post at month end • Paid-Posted-Distributed (via -Cost Distribution Utility/CDU) Paid (Payroll Results in P/R Module) Posted to GL (CC 1134400) Distributed

  10. Salary and Wages – Suspense Accts • 110 suspense account • DLCs • Central • Temporary holding place for salary and wage expenses • Invalid cost object, closed cost object, no cost object • Total accounts with balances - 72 • Balance in suspense accounts March 2010 –$2.5 million

  11. Salary and Wages - DACCAs • Salary and Wage Distribution Reports (created by CDU) • Tie to SAP FI Postings • Redistribution • Electronic Salary Distribution System (eSDS) • Late Salary Change Process

  12. Taxes - Withholdings

  13. Taxes - Withholdings Total employee tax withheld CY 2009 - $250 million !!! • Fed Tax withheld - 59.12% • TX EE Social Security Tax - 17.38% • TX EE Medicare Tax -5.13% • Fed Tax NRA - 0.38% • MA State tax - 17.90% • VA state tax - 0.05% • CA state tax - 0.04% • AL state tax - 0.02% • NM state tax - 0.01% • DC state tax - 0.01% • NY state tax - 0.01% • CO state tax - <0.01% • MD state tax <0.01% • OH state tax - <0.01% • Kwaj tax for US citizen - <0.01%

  14. Taxes - Remittance Required by law to withhold taxes and remit • Federal • One-day rule • Income tax, EE FICA, and ER FICA (each week and EOM) – active and pension payroll • Income tax on long term disability (EOM) • Income tax on non-resident aliens (EOM) • Massachusetts State Income Tax • 4 payments/month • Other States Income Tax (withhold in 10 states) • Monthly • Unemployment (excluding MA) • Quarterly

  15. Taxes – Why On Time? Penalties • Federal – 2% penalty if 1 to 5 days late • Weekly – $880K x 2% = $17,600 • Monthly - $18M x 2% = $360,000 Levies • Withhold other payments (refunds, scholarships, partnership payments) if we do not remit • Levy our accounts and related accounts (i.e. alumni clubs…anyone using MIT’s EIN)

  16. Deductions

  17. Deductions - Statistics • 340 deduction types in SAP • Used 63 types CY2009 • $160 million in deductions in CY2009 • Deductions taken based on priority settings in SAP • Group A - I.R.S. Tax Levy, Summons, State Tax Levy, Child Support,Student Loan) • Group S and T – TechCash, Alumni Fund, 457(b) Plan

  18. Deductions - Statistics Retirement Plan 39.7% • Retirement Plan Catch Up 4.3% • Credit Union 16.8% • Network Blue New England 9.0% • M.I.T. Trad Health Plan 6.8% • Delta Dental Plan 2.3% • Life Insurance Plan 2.3% • Tufts Assoc Health Plan 2.2% • Medical Expenses 2.2% • 457(b) Standard Plan 2.0% • Athletic Card 1.9% • Dependent Care 1.3% • Parking Fee – Annual 1.2% • BlCross-BlShld PPO 0.9% • M.I.T. Flex Health Plan 0.8% • MBTA Pass – PreTax 0.8% • Educational Loans 0.8% • Long Term Care Insurance 0.6% • Child Support 0.4% • Union dues 0.4%

  19. Deductions -Remit/Distribute External (Remit) • Fidelity • Credit Union • Garnishments (Child Support, Levies, Summons, etc) Internal (Distribution) • Health Plan – Delta, Vision, Network Blue • Parking • Tech Cash Reconcile

  20. Deductions - Arrears When an employee’s gross is less than the sum of all taxes and deductions • Leave without pay • Low gross (reduced effort, reduced hours) • Prior period payroll overpayment claim taken from current pay General guide – direct bill when >3 months

  21. Tax Filings

  22. Tax Filings - Institute Monthly • Other States (PIT, State Disability, State Training) Quarterly • Form 941 – Federal Income & FICA Tax • Form M941D – MA State Income Tax • Unemployment • MA (WR1 and 1700-HI) • Other States Annual • Fed • W-3 (with W-2s) • Form 945 Pension & LTD • Form 1042 • MA – File Fed Form 945 Pension & LTD • Other States annual reconciliation

  23. Tax Filings - Individual W2s – Regular Employees • 22,000 1042S – Non- resident Aliens • 1,600 1099R • 5600 pensioners • 150 LTDs

  24. Reconciliation - Types Accounts • Approximately 170 accounts (Active & Pension) • Types of accounts • Liability • Suspense • Claim Receivable • Clearing Filings • W-2s to 941s • 945s to 1009Rs • 1042 to 1042S

  25. Reconciliation - Pentagram Payroll Results (Reconciliation Report) Warehouse (Gross to Net - Brio) General Ledger (Summary Statement) Filing Remittance

  26. Contact Information Email – payroll@mit.edu • Linked to the REQUEST TRACKER • Assigned to individual by moderator • 2009 – 12,350 total tickets (approx. 47/day) Phone - 3-3337

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