Garnishment

[Blessed]

Hi ! I'm using Powerchurch 11.5. The state is requiring 10% of an employee's gross salary be sent monthly until garnishment is paid in full. How would I go about setting this up in Payroll? And is there a way to pull this payment over as an invoice at the end of the month to send it? Would appreciate any help

[NeilZ]

Hi ! I'm using Powerchurch 11.5. The state is requiring 10% of an employee's gross salary be sent monthly until garnishment is paid in full. How would I go about setting this up in Payroll? And is there a way to pull this payment over as an invoice at the end of the month to send it? Would appreciate any help

This is very easy to do, as I have to do it with an employee who has child support payments.

1. Create a new Item Description for this garnishment. This would be of type Other Deduction. You would select an "Item Number" to use; enter the "Description" of the deduction, in this case "State Garnishment"; create a new Funds Accounting Liability Account by clicking on the circled + sign as you would any liability account, again give it a description of State Garnishment". This would have a Tax Options setting of after tax deduction. You would also need to setup an Accounts Payable vendor. Again, you can do this by clickin the plus sign next to 'AP Vendor', fill in the info with the state office address, and any account number, and so on as you would for any vendor. I would add a note to explain what this is being used for.

2. Then, under the Maintain List of Employees you would locate the employees record, select the Pay Items tab, and then click on the ADD button to add a new Pay Item. You would select the new Item Description you setup in step 1. You'd find it from the drop-down selection under 'Other Deduction'. Highlight it, then click the NEXT button. You would then select the Percent selection from the Amount/Percent pull-down, and enter 10.000 in the Percent box. Leave the default GL account setting checked as it will use the liability account you setup under step 1.

Not knowing how many pay periods you use, I would just leave it active for all pay periods, then just create the AP invoice monthly.

Now as to that, within Payroll its very easy to create an Invoice if cutting a check, or Manual Check, if you're paying via EFT. By the way, if you're not using this method to pay your monthly taxes, you're creating extra work for yourself as it uses the same amounts the system generates for tax deduction and the Federal 941s.

Head to the Accounting menu and navigate as follows: Accounting -> Payroll -> Create Accounts Payable Entries for Deductions. The Create Accounts Payable Entry pop up window will appear. Look for the Vendor ID you created in step 1 above, when you select it, the list below will reflect all the deductions that have been made for the Garnishment. Select the ones you're going to pay for the month in question. For example, you're getting ready to send a check to the state for July, its the middle of August and you have deductions for July and August. Only select July's deductions.

Enter the due date, for me its the date I'm going to be cutting the check, for you it may be something else. Enter a reference, then select the 'radio' button for Invoice or Manual Check. Then click the OK button. An acknowledgement window will pop up telling you something to the effect that an invoice was created in Accounts Payable for the amount of $.xx.

You're done in payroll. All you need to do now is head over to Accounts Payable and print the check.

[Blessed]

Thank you so much for the step by step instructions. I did a trial run for next week and it worked great! I am planning to do the payments through EFT. Thanks for the tip. Have a great evening