- Knowledge Base Categories:
- School Accounting System
- Payroll
FAQ: How should I handle insurance deductions for 9-month employees where the insurance needs to be paid over 12 months?
There are several ways to set up the School Accounting System to handle deductions to be paid over 12 months for 9-month employees. Below are three of the most common methods; follow the instructions for the one (or a combination of the different options) that will work best for your district.
Option 1: Enter Higher Rates with Override Payment
Set up the deduction in the Employee File to have it withhold and expense at a higher rate during the months the employees are getting paid, and then enter an Override Payment on the Deductions Payable screen in the Deduction File for the appropriate deduction (and checking account/fund) so the check to the payee is correct each month. For example, if the yearly amount paid by an employee for a deduction is $90, set up the deduction to withhold $10 each pay period ($90 / 9 = $10), and then enter the Override Payment of $7.50 for the deduction ($90 / 12 = $7.50, which is assuming just one employee has the deduction and there is not a portion paid by the employer). For step-by-step instructions on adding an override payment, refer to the Adding a Deductions Payable or Taxes Payable Entry topic in the Help File.
Option 2: Utilize Process if No Pay Field (Applicable for Deductions Paid Entirely by Employer)
On the Deductions screen in the Employee File, set up the deduction selecting the Process if No Pay field for the Employer share in order to expense and pay the employer share even when the employee is not getting paid. For example, if the deduction is paid entirely by the employer and the yearly amount for the deduction is $90, set up the deduction entering $7.50 as the monthly rate to expense ($90 / 12 = $7.50) and select the Process if No Pay field so that the amount will be expensed when the employee is not getting paid.
If the Process if No Pay field is selected for a deduction, a pay code must be selected as the Primary Pay Code on the Wages screen of the Employee File for the employee, or an OVERRIDEGL pay code must be set up on the Wages screen with the appropriate expense account number(s) entered and be cross referenced to the deduction.
Important: Option 2 is not recommended for Missouri and Illinois school districts who have the Retirement on Board’s Share field (in the Deduction File) selected for their insurance deduction(s).
Option 3: Set Up Separate Deduction
If desired, to track the summer amounts independently from the other amounts normally paid during the 9 months when the employees are working, set up a separate deduction for the summer rates. The separate summer rates deduction can be set up for the applicable employees to have the extra summer amounts withheld and expensed throughout the year when the employees are getting paid. For example, if the deduction is paid entirely by the employee and the yearly amount for the deduction is $90, set up the normal deduction with $7.50 as the rate to withhold ($90 / 12 = $7.50) and the summer rates deduction entering $2.50 as the rate to withhold ($90 / 12 = $7.50, which is the monthly amount; then $7.50 x 3 = $22.50, which is the total amount for the summer months; and finally $22.50 / 9 = $2.50). To ensure the checks for the deductions write for the correct amounts during the 9 months the employees are working, either select the Hold Check field for the separate summer rates deduction in the Deduction File (during the summer months, would unselect the Hold Check field and enter an Override Amount to be the correct monthly amount for the 9-month employees), or tie the separate summer rates deduction to a unique pay group and do not select the particular pay group in the payroll calculation batches processed during the 9 months the employees are working (during the summer months, would need to enter an Override Amount for the correct monthly amount for the 9-month employees and then select the applicable pay group for the summer payroll calculation batches).
If needed, the separate summer rates deduction can be set up with the Process if No Pay field selected (refer to Option 2 above for more details on using the Process if No Pay field). Depending on how the separate summer rates deduction is set up for the employees, Start Dates and/or End Dates can also be entered to stipulate when the deduction starts and stops.