1. How Custom Payroll Rules Solved Our Most Complex Implementation Challenges

2. Questions to Consider What are rules anyway? The Power of Payroll Rules

3. Questions to Consider What good are rules to solve payroll processing problems? What kinds of scenarios are appropriate for using rules? What are the benefits of using payroll rules as opposed to other ways to meet requirements? The Power of Payroll Rules

4. Let’s consider the following scenarios… The Power of Payroll Rules

5. Your organization has 3 unions. The dues are calculated as follows: Union #1 – 0.00-0.50 FTE, $5.00 weekly; 0.50-0.74 FTE, $7.00 weekly; 0.75-1.00 FTE, $9.00 weekly. FTE can change every month. Scenario 1 – Lots of Unions

6. Union #2 – Fair share of 0.90% of eligible pay OR Full member dues of 1.10% of eligible pay where eligible pay is base earnings and overtime but not longevity or other bonuses. These rates change every year. By the way, you have to consider retrocalculations in determining the amount of dues to take each pay. Scenario 1 – Lots of Unions

7. Union #3 – $6.00 per pay, but only for the first 15 weeks of the year Scenario 1 – Lots of Unions

8. And what about reporting and third party remittances for all these deductions? Scenario 1 – Lots of Unions

9. About how much effort would the data entry / maintenance for these dues require? Scenario 1 – Lots of Unions

10. How would / do you handle this sort of requirement now? How do you maintain the records for individual employees? What sort of maintenance does your method require? Scenario 1 – Lots of Unions

11. How Payroll Rules Can Help… First, use IT0057 (Memberships) instead of IT0014 for the dues. Scenario 1 – Lots of Unions

12. How Payroll Rules Can Help… Feature PAYEE can now be used to default separate wage types for fair share or member dues for particular unions. Scenario 1 – Lots of Unions

13. How Payroll Rules Can Help… Next, configure an accumulator (like wage type /102) to keep the eligible wages for union #2. Scenario 1 – Lots of Unions

14. How Payroll Rules Can Help… Store the rates for the various union dues in T511K. (Here’s the history you needed!) Scenario 1 – Lots of Unions

15. How Payroll Rules Can Help… You are ready to write and apply the rule! Scenario 1 – Lots of Unions

16. You have a 401(k), 403(b), or 457 plan. The employees like choice, so they have 100 providers to choose among. Scenario 2 – Benefits Buys Lunch Today

17. The providers do not share data and you do not have a vendor to serve as a middleman to distribute the payroll contributions. Scenario 2 – Benefits Buys Lunch Today

18. Just remember, you have one plan but 100 providers. Each provider has its own interface and remittance requirements. Scenario 2 – Benefits Buys Lunch Today

19. It may be obvious that a separate wage type is needed for each provider. That means your benefits team needs to configure 100 plans because each plan is limited to one employee pre-tax wage type. Scenario 2 – Benefits Buys Lunch Today

20. Your benefits consultant is probably not happy at this point. If and only if you like him, you can provide the following solution using payroll rules. Scenario 2 – Benefits Buys Lunch Today

21. First, have the benefits team configure each vendor as an investment for the single savings plan. (This is MUCH less work than configuring 100 plans.) Scenario 2 – Benefits Buys Lunch Today

22. Now, write a payroll rule to take the employee pre-tax contribution as an input and allocate it among the various investments chosen by the employee on IT0169. Scenario 2 – Benefits Buys Lunch Today

23. Another twist to this scenario would be the case of a 401(k) where a bank is the trustee. Your company decides to offer a self-directed option using a broker. Scenario 2 – Benefits Buys Lunch Today

24. This same approach could be used – just make the trustee bank and the broker separate investments. Scenario 2 – Benefits Buys Lunch Today

25. Since you handled the previous situations so well, your organization now decides to add a nonqualified, executive plan for those lucky enough to max out their annual 401(k) contributions. Scenario 2 – Benefits Buys Dessert, Too

26. The plan offers employees an automatic cutover once the 401(k) maximum is met. Contributions including employer match continue at the same rates, but go to the nonqualified plan instead. Scenario 2 – Benefits Buys Dessert, Too

27. You could handle this scenario by configuring additional plans and maintaining IT0169, but that would be a pain and you already know people would make keypunch errors or update the records late. Scenario 2 – Benefits Buys Dessert, Too

28. Consider writing a rule to administer the nonqualified plan automatically. Think about the manual effort this approach could save. Scenario 2 – Benefits Buys Dessert, Too

29. Your company is building a plant in a neighboring state. The neighboring state has local income taxes but your home state does not. Scenario 3 – Magical Wage Types

30. You need to have certain of your employees help with the set up of the new plant. They will spend significant amounts of time there. Since the two states have reciprocal agreements, you do not have to worry with changing state taxes for the employees HOWEVER… Scenario 3 – Magical Wage Types

31. Your company promises to gross up employee wages to cover the local taxes on each paycheck. Unfortunately, the employees spend varying amounts of time at the new plant each week, so a simple gross up on IT0014 will not work (unless of course you want to give money away!). Scenario 3 – Magical Wage Types

32. What should you do? Scenario 3 – Magical Wage Types

33. A rule can automate the gross up for the local taxes. Scenario 3 – Magical Wage Types

34. Even if the particular scenario might not apply to you, this approach has proven very useful (and time saving!) for the following scenarios: Scenario 3 – Magical Wage Types

35. FICA Tax Models Scenario – Some employees are subject to FICA and some are not, depending on criteria such as public retirement systems or status as a student at an accredited institution of higher education. Scenario 3 – Magical Wage Types

36. Nonresident Alien Taxation Scenario – NRA’s may enjoy preferential tax calculations based upon the treaty they claim. Scenario 3 – Magical Wage Types

37. Which scenarios at your organization could benefit from this approach? Maybe… Scenario 3 – Magical Wage Types

38. Deferred pay employees – getting benefits to be deducted over 20, 22, or 24 pays instead of 26? Getting 20 pay deductions remitted to same third party vendors as usual deductions? Taking employer contribution rates to more than 2 decimals? Additional state tax withholdings for states where SAP does not support this? Scenario 3 – Magical Wage Types

39. Social Security integration with pension or retirement plans? Overriding health plan deductions for dual employees? Adapting logic from foreign schemas to your organization? Scenario 3 – Magical Wage Types

40. Thank you for attending! Please remember to complete and return your evaluation form following this session. Session Code: 2204