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Processing Life Insurance Payment Through Payroll
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1. Using the PAYROLL/PAYROLL PAYMENTS - CURRENT or PAYROLL/PAYMENTS-FUTURE program, the amount should be entered using a pay type of Life Insurance Premium. This pay type represents one kind of non-cash earnings for the employee.
2. This pay type will be treated differently for taxation purposes. Using this non-cash earnings amount, the tax amounts for Medicare and Social Security will be calculated during the Initialization of the pay and PAYROLL PAYMENTS - CURRENT program.
3. No Federal, OhioState, or OSDI tax amounts will be calculated. All of these will be treated according to the federal rules. The software provides the ability to withhold city tax on non-cash earnings. This can be activated by checking the "Tax Non Cash Earn" field on the city tax record in the CORE/PAYROLL ITEM CONFIGURATION programscreen.
4. Complete the payroll.
The non-cash earnings amount will not be included in the gross pay amount, nor in the gross totals found on Pay Report or REPORTS/PAY AMOUNT SUMMARY REPORT OPTIONS. However, the non-cash earnings amount is being included in the adjusted gross figure because the amount is considered part of the taxable gross even though no tax is being withheld on it. Both the Pay Report or REPORTS/PAY AMOUNT SUMMARY REPORT OPTIONS will provide a total figure of all non-cash earnings in the total section. This extra total will help in with balancing purposes.
Life Insurance Payment was Not Processing Through Payroll
If the Life Insurance Premium Pay Type was NOT USED prior to the last pay of for the calendar year, employee the Life Insurance (NC1 in classic) payment amount must be entered under manually in order for the Life Insurance amount to show correctly on the W2 form and to insure that the Quarter balances.
Go to Core-Adjustments- Click on Create: Find the Employee, choose the 001 Federal Payroll Item, Type- Life Insurance, Transaction Date and Amount in order for the Life Insurance amount to show correctly on the W2 form and to insure that the Quarter balances. Amount
When the Save button is clicked this will update the total and taxable gross fields for any Payroll Item that taxes Life Insurance Premiums (Federal, State, OSDI, City, (if applicable) and Medicare. This is then reflected on the W2 Report.
The employee will owe city tax for the Life Insurance Amount not paid through the system. This will be reflected when the employee files their taxes with the city. Core-Adjustments- Click on Create: Find the Employee, choose the 001 Federal Payroll Item, Type- Life Insurance, Transaction Date and AmountWhen the Save button is clicked this will update the total and taxable gross fields for any Payroll Item that taxes Life Insurance Premiums (Federal, State, OSDI, City, (if applicable) and Medicare. This is then reflected on the W2 Report.
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