how to deduct tuition from payroll for employees

Fund Accounting, Accounts Payable, Accounts Receivable, Payroll

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Sandy
Posts: 49
Joined: Sat Jan 01, 2011 9:44 pm

how to deduct tuition from payroll for employees

Post by Sandy »

Is it possible to deduct tuition for daycare from employee payroll? We have 2 employees who also have children in our daycare. They have a reduced tuition for their child and would like to have the tuition deducted directly from their paychecks.

Is this possible and what are the transactions to complete this? We would need to take the tuition from payroll and show it in receivables.

Thanks for your help.
Sandy Daniel
Always learning and always grateful!

Matt
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Location: Jacksonville, AL

Re: how to deduct tuition from payroll for employees

Post by Matt »

It is possible to deduct tuition for daycare from an employee's pay and have this deduction post against a receivable account. To do this you will need to set up a new Pay Item as an "Other Deduction". The liability account will need to be the receivable account. The bank account will be your normal checking account. The presumption is that you have already recorded an entry to establish the receivable in Fund Accounting. When the payroll is posted this deduction will decrease the receivable balance.

Sandy
Posts: 49
Joined: Sat Jan 01, 2011 9:44 pm

Re: how to deduct tuition from payroll for employees

Post by Sandy »

Does this mean that I can setup a receivable for each employee and when payroll is posted it will reduce the amount for each individual employee or is that possible? Do I need another step to do that or can I just rely on a payroll report to prove the payment for each employee? I am just trying to make this as automatic as possible. Thanks for the help.
Sandy Daniel
Always learning and always grateful!

Matt
Authorized Teaching Consultant
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Posts: 733
Joined: Fri Dec 05, 2003 4:04 pm
Location: Jacksonville, AL

Re: how to deduct tuition from payroll for employees

Post by Matt »

Unfortunately, if you are going to have the tuition deducted from the employees pay in the Payroll Module it is not possible to set up a separate receivable record for each employee in the Accounts Receivable module and get the accounting to work right. With that in mind, here are the steps you will need to take.

1). Establish the receivable in Fund Accounting by inputting an entry that debits an accounts receivable account and credits an income account for the total tuition amount for each employee.

2). Set up the Pay Item for the tuition payment deduction as I discussed in my previous post.

Then, as the payroll deductions are made they will automatically reduce the receivable balance in Fund Accounting once they are posted. Since you only have two employees that you will be doing this payroll deduction for, you should be able to run the account activity report in Fund Accounting on the accounts receivable account and readily determine how much is owed by each employee. You can also run the Selected Payroll Data report in the Payroll Module for the tuition deduction Pay Item to see the payments made by employee.

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