The following is a list of settings available for each check type for US pay groups.
Manual Checks:
- Suppress display of this Check in ESS. See Suppress Manual Checks in ESS.
- Employment Type
- Residence Location
- Exclude Additional Tax Amounts
Additional Checks:
- Exclude direct deposit accounts from disbursement
- Exclude payroll card accounts from disbursement
- Disburse to remainder account only
- Tax Method
- Payment Frequency
- Residence Location
Onsite Checks:
- Tax Method
- Payment Frequency
- Residence Location
These settings are described as follows:
Disburse to remainder account only
Select the Disburse to remainder account only checkbox and Dayforce only disburses earnings recorded on the check using the direct deposit or pay card method if the employee has been set up to receive 100% of their earnings to either method. If employees have elected to receive a portion of their pay on either a pay card or via direct deposit, payments made using check templates with this option selected are sent entirely to their default method.
Employment Type
Select an option in the Employment Type drop-down list to configure the check template so that employees with one employment type can be paid as a different one and receive the appropriate year end tax form for each type.
- Leave this drop-down list cleared to respect the employee-level employment type configuration.
- Select Contractor to map the check's earnings to the 1099-M form.
- Select Employee to map the check's earnings to the W-2 form.
- Select Pensioner to map the check's earnings to the 1099-R form.
Exclude direct deposit accounts from disbursement
Select this checkbox and payments made with the check aren’t sent to employees using direct deposit, even if an employee has elected to receive a portion of their earnings through direct deposit.
Exclude payroll card accounts from disbursement
Select this checkbox and payments made with the check aren’t sent to employees using pay cards, even if an employee has elected to receive a portion of their earnings through a pay card.
Payment Frequency
Select the number of pay periods in the Payment Frequency drop-down list to override the number of pay periods per year the application uses in tax calculations.
The number of pay periods per year need to be overridden for payments that represent a different pay frequency than normal, so that they are taxed correctly.
For example, an employee that is normally paid $1,000 weekly is paid their two weeks’ vacation time up front on an additional check of $2,000. When the application calculates the taxes to withhold, it would normally multiply the payment about by 52 (as an employee paid weekly is paid 52 times a year). However, multiplying 2,000 by 52 implies that the employee earns more annually than they actually do.
Because this payment represents two weeks’ worth of pay, taxes should be calculated based on 26 pay periods per year; to accomplish this, administrators can configure check templates with different pay frequencies.
In the example above, when the two weeks’ vacation time is paid on a check template with a biweekly pay frequency, the application can correctly calculate taxes based on 26 pay periods in the year.
Tax Method
If necessary, select an appropriate supplemental tax in the Tax Method drop-down list.
This parameter is used to define which check templates are supplemental payments so that bonuses or off-cycle payments are taxed properly. Typically, when calculating the taxes to withhold for normal payments the calculation takes into account the employee’s pay and their pay frequency to determine their tax bracket and then applies the corresponding percentage.
Consider a simplified example where an employee earns $1,000 per week. To determine the taxes to withhold, the application multiples 1,000 by 52 to determine their annual salary, uses this number to determine their tax bracket, and multiplies the percentage for their tax bracket by $1,000 to determine the amount of taxes to withhold.
If supplemental payments were taxed with the same calculation, the application would over withhold taxes; continuing the example above, when the same employee earns a bonus of $4,000 on a separate check, the application would incorrectly calculate the employee’s annual income as $208,000 (4,000 multiplied by 52). As a result, the employee belongs to a higher tax bracket than they should and likely pay a higher tax rate than they should on their bonus.
The application treats payments made on check templates configured as supplemental payments differently; a custom rate is applied to the payment amount and the application does not calculate the employee’s taxes as if they made the supplemental payment on each pay run.
Residence Location
If necessary, select a state from the Residence Location drop-down list.
If an employee lives and works in multiple locations, the residence location associated with the check's earnings can be overridden by selecting an alternate option from the list.
If a supplemental tax method was selected from the Tax Method drop-down list, select the Exclude Additional Tax Amounts checkbox to exclude any additional tax amounts that the employee has elected to pay, above the regular federal and state tax amounts.