USA Payroll Calculation for Additional pay that is not a bonus

[Nelli]

Hello. Good Morning.

I work for a Municipality in California and I'm trying to manually calculate my paycheck. The online paycheck calculators don't have a place to include additional pay which is not a bonus. We are provided money that goes toward our health insurance premiums but if we choose a plan that doesn't use all those funds then we are paid the difference but it is taxable at a different percentage than regular pay or a bonus.

I'm rolling out a new ERP and all employees will be getting a cost of living increase at the start of the new fiscal year, also some employees will be getting a new hourly rate as well to get us closer to the market rate. I want to make sure the calculations are correct but my background is in IT and I don't know the accounting lingo. Any help would be appreciated.

Thank you.
Nelli

 

[kirby]

Oh brother!
I cannot count the number of times I've had to fix a situation where the IT person was NOT given a financial person to check the accuracy of the new accounting system. Put simply - you need to have a financial person to be made part of your ERP rollout who can be responsible for verifying the financial accuracy of the system. And that is immensely true for systems that do payroll, and even more so if there is a union payroll or a deferred compensation plan. Please go get someone like that assigned to your project.
And if I were you i'd also insist on a formal UAT with signoff by the endusers.

 

[Nelli]

Thank you for the feedback. I do have 2 payroll people that are doing testing but they don't have an accounting background. Our current ERP system was set up by people who have retired. It is our fiscal year end so getting accounting folks to be added to the project now will be a challenge. We are only rolling out the Payroll, HCM, and Recruiting modules for this go-live. Finance is part of Phase 2 which seems old to me that we didn't start with them.

 

[kirby]

Well, good luck. I suggest at a minimum you send out a CYA memo detailing what resources you need to complete the project successfully. If mgmt decides not to provide that, then that's on them.
And don't rely on the assumption that what was done in the old system for payroll was correct.

 

[alexa345]

When it comes to calculating payroll for additional pay that is not a bonus, it typically depends on the nature of the additional pay. If it is considered regular wages or overtime pay, you would typically calculate it based on the employee's regular hourly rate or overtime rate, respectively, and the number of hours worked.

However, if the additional pay is categorized differently, such as commissions, allowances, or incentives, the calculation method may vary. In such cases, you would need to determine the specific formula or calculation method outlined by your organization's payroll policies or relevant employment laws.

 

[kirby]

Alexa knocked it out of the park! So, again, Nelli, do not assume what is being done now is correct. And if in doubt send an email to your mgr or head of payroll and say “ I need a confirmation on this business rule”. Stick to your own field of expertise and let others who are supposed to be the payroll experts take responsibilty.