The following steps outline the steps involved when the board agrees to pay an annuity on the employee’s behalf and this payment should be treated as wages - and can be considered for retirement if desired. These steps may vary based on what has been negotiated and the specifics of each agreement. Please reach out to your tax advisor for any tax related questions.
Create a Position for the board paid annuity. If retirement is to be withheld on the payment, select the appropriate retirement option from the Retirement Code dropdown. If retirement is not to be withheld, se the Retirement Code dropdown option to None.
Create a Compensation for the board paid annuity. Depending on how the annuity should be paid will determine how the Compensation should be set up. Fields to give attention to based on how the board paid annuity is to be paid are:
Job Calendar
Compensation Start Date
Compensation Stop Date
Pay Plan
Pay Unit
Unit Amount
Retirement Hours
Hours In Day
Contract Work Days
Contract Amount
Contract Obligation
Pays In Contract
Stretch Pay
Calendar Start Date
Create a Payroll Item for the board paid annuity. Depending on how the annuity should be paid will determine how the Payroll Item should be set up. Fields to give attention to based on how the board paid annuity is to be paid are:
Rate Type
Pay Cycle
Employer Rate
Employer Withholding Max>Deduct Max Type
Employer Withholding Max>Max Amount
Employer Withholding Max>Specific Date