Payroll Codes Maintenance

When IPS is used as the local payroll application, the site accountant or controller must add the local payroll codes which identify employee earnings or deductions.

Adding a new Payroll Code:

Go to Maintenance. Select Payroll Codes, and click on Payroll Codes.
Click on Add (upper left).
Complete the required information:
- Pay Period: It will default to current pay period in company, and will appear grayed out.
- Company Code: Select desired company from drop down menu. If user session is restricted to one company code, then field will appear grayed oytut.
- Payroll Code: Enter a three-digit number to identify payroll code.
- Status: Set to Active if Payroll Code will be on use. User may change status to Inactive for Payroll Codes that will no longer be used.
- Payroll Type: Select one of two options:
  - Normal. It is the standard payroll which is processed every pay period.
  - Special. It refers to the additional payroll which sometimes is processed to reflect additional employee earnings pay, like Christmas bonuses, profit share, etc . This payroll is usually processed on a date different than the regular pay period dates.
- Priority: It refers to the order in which payroll transaction will be applied when running the Payroll Process. User may change default value (999) to any other number to set the desired order for processing payroll transactions.
  IPS will process transactions by Priority and then by Payroll Code. Therefore, if two Payroll Codes, say 209 and 210, have the same Priority, the system will process 209 first.
- Description: It is the proper local language expression which defines employee earnings paid under this payroll code. It is important to keep it brief and clear since this will appear in employee pay stubs.
- Formula: All transactions under payroll code will be multiplied by the value entered in this field. This factor can determine if all transactions entered or generated under this payroll code are to be added to, or substracted from employee pay. User may enter values considering the following examples:
- - Enter 1 if transactions which will be added to employee pay (employee earnings).
  - Enter - 1 if transactions which will be substracted from employee pay (employee deductions).
  - Enter 0 if any transaction under this payroll code will be recorded as 0.00 (zero).
  - Enter 0.5 if employee must receive 50% of the transaction amount.
- Income Tax Base: User must set an expression or condition to reflect the criteria for employee income tax calculation for all transactions under this payroll code. See examples below:
- - Enter the expression PAYROLLAMOUNT if the total transaction amount is taxable.
  - Enter the condition CASE WHEN (PAYROLLAMOUNT)<15*(MINIMUM SALARY) THEN (PAYROLLAMOUNT)-15*(MINIMUMSALARY) ELSE 0 END if transaction amount will be taxable only if it is lower than 15 times the minimum wage. This will mean that if transaction amount is greater than that, then it will be taxable.
  - Annual Exempt: To ensure that the tax-exempt base remains unaffected by the formulas entered in the field above, this field is used to record the maximum exempt amount. For example:
  - - Enter 30*SalaryMinimum to reflect 30 times the local minimum wage.
    - Enter 30000 to reflect $ 30,000.00 local currency amount.
  - Payroll Codes in: The company Annual Tax Statement, and all local company tax reports require that all employee earnings are added up under categories of similar nature, regardless of payroll code. For example all severance amounts paid are added up in the same category regardless of the employee earnings or benefits that were included in severance pay. This field where user must map payroll code to the corresponding category. Select category from drop down menu.
  - Social Security Tax Base: Field is used exactly as Income Tax Base, but it is intended for Social Security tax calculation.
  - ISN Tax Base: This field is similar to Income Tax Base, but it is used for a Mexico local tax calculation.
Click on the Add button located at the bottom left. The new payroll code will be added in the system and will be available for use to identify payroll earnings or deductions.