If you create a state tax threshold late in the current look-back period, and an employee has eligible earnings or hours from committed pay runs within the look-back period, the application does not count these amounts toward the threshold. This is because the application starts counting hours or earnings toward the threshold from the point that you create the threshold and onward. See State Tax Threshold Configuration.
However, you can update a current pay run in the Payroll module so that committed earnings or hours within the current look-back period are counted toward the threshold. When you add these amounts to a pay run, you need to do so in a way that does not impact the employee's actual pay, taxation, deductions, garnishments, or YTD totals. The employee was already taxed and paid for the time worked, and you are only adding this historical data to the pay run so that it is counted toward the state tax threshold.
You add these committed amounts to a pay run by creating a check with the Manual type. Using a manual check allows the application not to automatically calculate taxes, deductions, or garnishments for the amount.
When you create a manual check for including committed amounts in a threshold balance, don’t manually calculate the check (that is, do not click the Calculate button in the Check Entry tab of the Entries dialog box for the check). You need to commit the pay run without calculating the taxes, deductions, or garnishments for the check. The amount you enter for the check is counted toward the threshold balance without you having to calculate the check.
You can add the manual check to a regular or off-cycle pay run. Note that adding the check to a regular run will result in an additional earning statement, including in employee self-service, for that pay period. To maintain one earning statement per pay period, create the manual check in an off-cycle pay run.
The earning entries that you need to add to the manual check depend on whether the threshold has the Earning or Days type. This is described in the sections that follow:
Thresholds with the Earning Type
When a state tax threshold has the Earning type, you need to add a single earning entry to the manual check for the committed amount that you want the threshold to count. You must assign this earning entry to a work assignment or project of the threshold state.
Moreover, you must assign the earning entry to an earning code that has the Memo Deduction tax type defined in its earning definitions. Using a memo earning allows the amount not to impact the employee's actual pay, taxation, or YTD totals. Before you use this memo earning code, you must assign it to the earning grouping of the threshold that you want to impact. See Add Eligible Earnings to Earning Groupings.
As an example, in September 2020, you set up a $1,000 threshold with a yearly look-back period. In March 2020, the employee had $750 in earnings in the threshold state. Because you created the threshold in September 2020, the $750 from the committed pay run on March 2020 isn’t counted by the threshold, and the threshold count is at zero. To move the threshold count to $750, you create an off-cycle pay run in which you add a manual check with a memo earning entry for $750. You assign the entry to the work assignment of the threshold state.
Thresholds with the Days Type
When a threshold has the Days type, you need to add a separate earning entry to the manual check for each past day that should be counted toward the threshold. Moreover, you must assign each earning entry to a work assignment or project of the threshold state.
You need to assign each earning entry to an earning code that has an hourly calculation, and that is assigned to the earning grouping of the threshold. So instead of using a memo earning (as was described for thresholds with the Earning type, above) you would use the normal earning that mobile workers use to record travel earnings (for example, Travel Regular).
Each earning entry for a day worked must have the Business Date field defined, and each business date must be different. You can select any date during the current pay period in which you're creating the manual check.
If there are more days worked toward a threshold than days in the pay run, you can assign these earning entries to a different check template. For example, say you are working in a pay run with a weekly pay frequency and you need to record 10 days of past earnings. To do this, you assign 7 days of earnings to one check template with for each day of the week, and you assign the remaining 3 days to a different check template for 3 days of the week.
After you add the individual entries, you must create a single negative earning entry that totals the earnings of the individual entries for each check template. This negative entry must have the same earning code as the individual entries and must be assigned to the work assignment or project of the threshold state. Moreover, this negative entry must not have the Business Date field defined.
By creating the negative entry, you are canceling out the individual daily earnings that you added, so that they do not impact the employee's actual pay or YTD totals, but still cause the threshold count to increase. By leaving the business date cleared for the negative earning entry, the application does not decrease the days worked toward the threshold.
For example, in September 2020, you set up a 5-day threshold with a yearly look-back period, and 8 hours defined in the Standard Hours In Day setting. In March 2020, the employee had 4 days of earnings in the threshold state, with 8 hours worked each day. Because you created the threshold in September 2020, the 4 days from the committed pay run on March 2020 aren’t counted toward the threshold, and the threshold count is at zero. To increase the threshold count to 4 days, you create an off-cycle pay run, in which you create a manual check with the following earning entries:
- 4 earning entries, each with 8 hours of work, assigned to the Travel Regular earning code that mobile workers normally use to record travel time. Each entry has a different business date in the pay period defined and is assigned to a work assignment of the threshold state.
- 1 earning entry for negative 32 hours, also assigned to the Travel Regular earning code, and with no business date defined. This earning entry is also assigned to the work assignment of the threshold state.