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How do I set up third party sick pay codes?

Set up a pay code for payments to an employee from a third party provider. 

Third party sick pay refers to payments made to an employee by a third party, such as an insurance company or disability provider, for wages lost due to illness or injury. This type of payment is often part of an employer-sponsored disability insurance plan. 


Setting up a third party sick pay code

1. Open Connect Payroll > Organization > Pay Codes.

2. Click New (CTRL+N).

3. Click to select the Pay Code tab.

  • Enter 19 as the Pay Code. Unless 19 is already assigned to another pay code, which means you’ll need to choose to a pay code number that is not assigned.

  • Enter 01 as the Sub Code.

  • Enter Third Party Sick Pay as the Title.

  • Enter 3rdPty as the Abbreviated Title. Or use your own abbreviated title for the third party sick pay code.

  • Select Gross Miscellaneous as the Type.

  • Click to select the checkbox titled Allow Employee Options.

  • Click to deselect the checkbox titled Allow Employer Options.


4. Click the Employee tab.

  • Select Amount as the Amount/Rate/Percent Type.

  • Enter the wage account as the GL Account.

  • If you used a partial account to fill in the GL Account field, select Use Employee Allocations as the Employee Allocation Method.

  • Find the section titled Monthly Period Numbers and click Modify. Click to select the column heading titled 5 to select period 5. Click OK.


5. Click to select the Used in Calculations subtab.

  • Click the link titled Select Pay Codes.

  • When the Selection form displays, select the tax pay codes.


6. Skip the Use for Calculations subtab.

You do not need to select any pay codes on this tab.


7. Click Save (CTRL+S).

The pay code setup is saved. The Employee Pay Code Update warning message displays.


8. Click OK.

The pay code for third party sick pay is saved. The third party sick pay code is assigned to the last position in the pay code calculation order.


9. To change the pay code calculation order, click the menu button, next to the Calculation Order field on the Pay Code tab, to assign a different calculation order.

10. Move the pay code for third party sick pay into the correct calculation order.

The pay code for third party sick pay is saved with the correct calculation order.

 

 

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