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PAYROLL PowerPoint Presentation

PAYROLL

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PAYROLL

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  1. PAYROLL Sean p. Carney Adlai e. stevenson high school dist 125

  2. Government Agencies Employee Withholdings & Deductions Regulations Payroll Taxes; Pension Contributions Paycheck; W2’s PAYROLL Staffing & Payroll Changes Prenote Verifications Financial Institution Human Resources Reports; Check & Balance ACH Payments & Reports Payroll Vendors Supervisors Reports Approvals Rate Changes & Instructions

  3. EMPLOYEE GROUPS • Exempt vs. Non-Exempt • Administrative, Executive, Professional, Computer • Certified vs. Non-Certified • Salary vs. Hourly • Full-time vs. Part-time vs. ‘Variable’ • Union vs. Non-Union

  4. PAY PERIOD • Weekly • 52 pay cycles in a year • Bi-Weekly (every other week) • 26 pay cycles in a year (every few years there is 27) • Semi-Monthly (twice per month) • 24 pay cycles in a year • Monthly • 12 pay cycles in a year; only ‘Exempt’ employees can be paid monthly

  5. PAYROLL CALENDAR • Run dates • Payroll Dates • Time sheet due dates • Changes/Adjustments cut-off dates • Processing dates • Monthly occurrences • Quarterly occurrences • Annual occurrences

  6. Annual Occurrences IMRF Employer rate - Jan. 1 W-2 processing postmarked by Jan. 31 Send W-2 data to- SSA Illinois Wisconsin Federal/State tax changes FICA – change base

  7. SALARY SCHEDULES Certified Schedules: Negotiated Percent increase on base each year Based on CPI Step Years of Experience Years of Service Lane Degree Hours beyond degree

  8. Non-Certified salary • Starting wages • Based on experience • Individuals in that current category • No lower than $15/hr. • Increase based on CPI + evaluation

  9. TIMEKEEPING • Work Week • Illinois defines a workweek as a fixed and regularly recurring period of 168 hours – seven consecutive 24-hour periods. • Hours Worked • Illinois requires employers to pay employees for all hours worked. • Overtime • Illinois labor laws require employers to pay employees overtime at a rate of 1.5 times their regular rate when they work more than 40 hours in a workweek, unless otherwise exempt. • Unauthorized overtime must be compensated.

  10. MANDATORY DEDUCTIONS PAYROLL TAXES PENSION CONTRIBUTIONS Teachers’ Retirement System (TRS) 9% Member TRS contribution 1.12% Member THIS contribution Illinois Municipal Retirement Fund (IMRF) 4.5% Member contribution • Federal Income Tax (FED) • Tax Table • State Income Tax (IL/WI) • Tax Table • Federal Insurance Compensation Act (FICA) • 6.2% ; first $128,400 wages • Medicare • 1.45%; additional 0.9% on wages over threshold

  11. MANDATORY Benefits PAYROLL TAXES PENSION CONTRIBUTIONS Teachers’ Retirement System (TRS) 0.58 % Member TRS contribution 0.84% Member THIS contribution Illinois Municipal Retirement Fund (IMRF) Varies by District • Federal Insurance Compensation Act (FICA) • 6.2% ; first $128,400 wages • Medicare • 1.45%; NO additional 0.9% on wages over threshold

  12. VOLUNTARY DEDUCTIONS TAX SHELTERED NON-SHELTERED Basic Life Insurance Optional Life Insurance Disability Insurance Long-term Care Insurance IMRF Voluntary Additional Contributions Union Dues Wage Garnishments Reduces FED/IL/WI/FICA/Medicare: • Medical Insurance • Dental Insurance • Vision Insurance • Flexible Spending Account (FSA) • Health Savings Account (HSA) Reduces FED/IL/WI: • Tax Sheltered Annuities - 403(b) • Tax Deferred Annuities – 457(b)

  13. GROSS TO NET CALCULATION FORMULA EXAMPLE

  14. SAMPLE PAYCHECK

  15. PAYROLL CYCLE ACTIVITIES

  16. UPDATE PAYROLL DATA • Staffing • New Hires • Transfers (Depts) • Terminations • Compensation • Pay rates • Pay schedules • Deductions • Withholding (rates/tables) • Contributions • Voluntary deductions • Benefits • E/R Paid Insurance • E/R Paid Contributions

  17. Classify new employees • Staffing • Certified • Non-Certified • No Pension • Student Worker • PT less than 600 hours per year • FLSA Status • Exempt • Non-Exempt • Employee FTE • Full-time • Part-time • At will • Employee Wages • Salaried • Hourly

  18. Modify Existing Employees • Tax Adjustments • Changes in Federal or State W4 exemptions • Add additional Federal or state withholding amounts • Voluntary Deduction • Add or Remove • Modify Amounts • Insurance Adjustments • Add Single Insurance • Add or change to family coverage • Adjust payment for terminated employee

  19. VALIDATE TIME SHEET DATA • Hours Worked • Pay period dates • Start/End times • Excess over 40 • Accuracy • Overlapping time • Time off • Rate of Pay • Hourly pay • Overtime (1.5x) • Fixed (Stipend) • Approvals • Supervisor • Budgetary

  20. PREPARE PAYROLL • Record Dates • Pay period dates • Check Date • Categories • Salaried • Hourly • At Will • Transaction File • Contracts • Time Sheets • Hard Copies • Online Time Entry • Payment Type • Direct Deposit • Check

  21. CALCULATE PAYROLL • Exceptions • Maximums/Limits • Tax discrepancies • Negative net amount • Gross Adjustments • FED/IL/WI gross • FICA/Medicare gross • Gross to Net • Total Wages • Total Deductions • Net Income • Employer Costs • Gross Wages • E/R Paid Benefits

  22. VERIFICATION • Wages • Contracts • Time Sheets • Adjustments • Employee Counts • Add New • Subtract Termed • Comparison • Employee Counts • Gross • Net • Justification for changes • Benefits • Compare to prior • Factor adjustments

  23. Disburse Payroll • Check Stock • Blank - MICR • Pre-Printed • Checks • Sent to schools • Picked up by employee • Mailed USPS • Direct Deposit • Advice of Deposit • Report of Wages • Online Access • ACH File • Bank Transmittal

  24. Payroll accounting • Update accounting on Payroll records • Create accounting records on financial side • Create Vendor liabilities • State and Federal taxes • IMRF • TRS • FICA/Medicare • Insurance Carriers • Medical • Dental • Vision • Life/AD&D/Disability • Other • Flex Spending Administrator • Union/Associations • Charitable Organizations • Wage Garnishments

  25. DISBURSE VENDOR PAYMENTS • Internal Revenue Service • Payments > $100,000 due the next business day • Illinois Department of Revenue • Payments due within 3-5 business days • Teachers’ Retirement System • Payments due on the 10th & 25th • Illinois Municipal Retirement Fund • Payments due on the 10th • 403(b); 457(b) • Insurance Premiums • Flex Spending • Health Savings • Union Dues • Other • Payments typically due within 5 business days • Refer to individual Vendor rules and/or information

  26. Auditor’s reports • Payroll Summary • gross/net • all deductions • Long Payroll Register • Payroll in detail by employee • Check Registers • Direct Deposit • Actual check print • Direct Deposit-details • Deduction/Benefit Summary

  27. RINSE AND REPEAT!

  28. PAYROLL GUIDANCE Because of the financial, legal, and ethical factors involving payroll, it is important that school districts keep current with applicable laws, regulations, requirements, and other pertinent information. Internal Sources Board of Education Policies and Procedures Board of Education Meeting Minutes Human Resources Negotiated Agreements Employee Handbooks External Sources • Fair Labor Standards Act (FLSA) • Illinois General Assembly • Illinois State Board of Education • Teachers’ Retirement System • Illinois Municipal Retirement Fund • Internal Revenue Service • Illinois Department of Revenue

  29. Questions