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How to set up third-party sick pay
by Intuit• Updated 1 year ago
This article will assist you with setting up third-party sick pay in EasyACCT.
Special rules apply to the reporting of sick pay payments to employees. How these payments are reported depends on:
- Whether the payments are made by the employer or a third party,
- Whether the third party is an agent of the employer, and
- Whether payroll tax liability is transferred from the employer to the third party.
This solution offers general guidelines. Setup varies by plan.
Follow these steps to set up third-party sick pay:
- Go to Write-Up or Batch Payroll.
- Select Update Company Files, Employee Information.
- Highlight an employee and select Edit Record.
- Switch to the Wage/Withholding tab.
- Use the first available GP field for third-party sick pay.
- Enter a description in the GP field.
- In the Applicable Taxes section, mark the checkbox for the taxes that the employee and employer are responsible for.
- Use the first available WH field for third-party sick pay.
Don't check any of the applicable taxes or W-2 boxes.
- Switch to the Earnings Records tab.
- Make sure the accounts for the applicable GP and WH fields are correct.
Follow these steps to record the third-party sick pay:
- Go to Batch Payroll, Process Payroll, Payroll Check Computation.
- Enter the Current Payroll Check Date to be Processed.
- Click Continue.
- Select the employee to process.
- Select the applicable GP code used for sick pay.
- Enter the amount of the third-party sick pay in the Amount column.
- On a new line, select the same employee.
- Choose the Code for the sick pay WH item.
- Enter the amount of the third-party sick pay in the Amount column.
- Close the screen.
- Select the Print Checks/Advices option from the System Navigator.
The check generated will have a net pay of $0, and was used to calculate the employee and employer tax liability.