This is how the payroll will allocate the employer's portion of the pay code. The employer's portion will use the employee allocations from the employee position allocations or the employee pay code to allocate the pay code amount. If the allocations on the employee position aren't set up, then the pay code will use the allocations on the employee pay code. 

For example, an employer can use the employee allocation method to calculate a percentage of an employee's gross earnings for social security. 

You can use the employer allocation method to choose which allocation the method the pay code will use to allocate the pay code amounts at the pay code level, the employee pay code level, or the employee position level. 

 

There are three options: 

• Do not allocate pay code amount. Use the GL account from the employee pay code to create transactions. Usually, this option is for pay codes that calculate employer paid benefits, state taxes, and federal taxes. 

• Use employee allocations to allocate pay code amount. Use this option when you're using partial account(s) in the employee allocations. For example, regular pay (1-00) uses the employee allocations to send an amount to a savings account, a retirement account, a health savings plan, and so on. Most pay codes will use this option. 

• Use transactions to allocate pay code amount. Use this option to use the partial account(s) on the employee pay code to use the amounts on the employee's check to create transactions. 

 

Payroll will use the employee allocation method on the pay code at the organization level to process the pay code unless the employee pay code has a different employee allocation method. 

These options are available in the 2022.11 release. 

 

Do not allocate pay code amount

The pay code amount uses the specified GL account from the pay code to as the GL account. The pay code will not use the allocations from the employee pay code or employee position pay code. 

Organization > Pay Codes

Use employee allocations to allocate pay code amount

Use the employee allocations from the employee position pay code to complete the GL account. Do not use the employee allocations from the employee pay code (Modify Existing Employees > Pay Codes tab). The employee position pay code is located on the Positions tab > Allocations tab in Modify Existing Employees. 

Use employee allocations uses the employee position pay code

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• If there is a complete or partial GL account in the employee position allocation, it will override the complete or partial GL account on the pay code. 

 

Use transactions to allocate pay code amount

Use the GL information from the gross pay codes on the check to calculate the percentage of the deduction pay code for each GL account.

For example, social security is split based on the percentage each gross type pay code contributes to the gross pay total. The employer allocation method on the social security pay code is set to use transactions, the debit account is set to use a partial account (FF-DD-130), and the credit account is the FICA Payable account (02-22210). 

Example of calculating social security using transactions

First, the pay code divides the gross pay code amount by the gross pay total to calculate a percentage. It does this calculation for each gross pay code on the check. In this example there is a gross type pay code for regular pay, vacation pay, and sick pay. 

[Gross Type Pay Code Amount] / [Gross Pay Total Amount] = Percentage of Gross Pay

$2,752 / $3,440 = 80%

$430 / $3,440 = 12.5%

$268 / $3,440 = 7.5%

 

Second, the pay code multiples the gross type pay code amount by the percentage to find the deduction amount. 

[Social Security Tax Total] x [Percentage of Gross Pay] = Deduction Amount

$209.16 x 80% = $167.33

$209.16 x 12.5% = $26.15

$209.16 x 7.5% = $15.68

 

Third, the pay code creates a transaction using the partial GL account to record the amount in the debit account and credit account. 

Debit account

10-44-130, $167.33-

10-50-130, $26.15-

10-54-130, $15.68-

 

Credit account

02-22210, $167.33

02-22210, $26.15

02-22210, $15.68

 

 

 

 

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