Payroll tax

[ckoosman]

I have 2 funds, one for the church and one for the school. There are some employees that do work for both, for example the custodian. Another example is the school secretary, who also plays organ at church. My question is whether there is a way for Power Church Plus to allocate the employer share of the payroll tax to each of the funds. I have everything else working except all payroll taxes are posting to fund one. I tried setting up multiple SS & Medicare tax items, but you only apply the tax type to each income item, and not the tax item, so this doesn't appear to work. It would be nice if this could be automated, so a journal entry won't need to be done each month reclassify some payroll tax expense.

[NeilZ]

I have 2 funds, one for the church and one for the school. There are some employees that do work for both, for example the custodian. Another example is the school secretary, who also plays organ at church. My question is whether there is a way for Power Church Plus to allocate the employer share of the payroll tax to each of the funds. I have everything else working except all payroll taxes are posting to fund one. I tried setting up multiple SS & Medicare tax items, but you only apply the tax type to each income item, and not the tax item, so this doesn't appear to work. It would be nice if this could be automated, so a journal entry won't need to be done each month reclassify some payroll tax expense.

Unfortunately, there is no way to do this programmatically. I am guessing that you have two separate income items for each employee, each pointing to the correct expense account (one for church & one for school).

Other than printing two separate checks, you'll have to do this by hand.

FWIW ... I, myself, would rather do the two separate check option. In this way there is a clear audit trail of payroll/tax/hours worked for each separate entity.

[ckoosman]

Thank you. I had pretty much tried everything, so I kind of suspected it would need to be done manually. However, I think I also had tested an employee that is only at the school, which is fund 2, and I think their payroll tax was also posting to fund 1. Again, it is still the same problem of assigning a tax type (i.e. SS) to the income item, rather than a tax item (i.e. SS-School). So I don't know if doing 2 separate checks would solve the problem. Am I missing something?

[NeilZ]

Thank you. I had pretty much tried everything, so I kind of suspected it would need to be done manually. However, I think I also had tested an employee that is only at the school, which is fund 2, and I think their payroll tax was also posting to fund 1. Again, it is still the same problem of assigning a tax type (i.e. SS) to the income item, rather than a tax item (i.e. SS-School). So I don't know if doing 2 separate checks would solve the problem. Am I missing something?

You need to check the School's Employer Tax items, I suspect they're pointing to the Church Accounts for the expenses rather than the School expense account. This also means that you may also be moving the funds to the church tax liability account. You need to have two separate tax liability accounts, one for the school, and one for the church. Then when you create the tax payment you'll have to use both liability accounts as well as the individual checking accounts.

[ckoosman]

I had set up 2 SS & 2 Medicare tax items, one posting to fund 1 payroll tax expense and the other posting to fund 2 payroll tax. Our plan was to use the 2 separate funds just for income and expense reporting and have all assets and liabilities in fund 1. However, to test I had set up the church items posting to checking account in fund 2, and I thought I had done the same with the liability, but maybe not. I still don't see how you would point the fund 2 salary (income) items to use the correct SS & Medicare items for fund 2.

In addition, if there are separate checks printed for employees that have wages allocated to both church and school, I see a couple possible problems with that. First, won't the system under-withhold for federal and state income tax withholding, since it won't be calculating on their total pay per pay period. Secondly, in order to set up employees with a church pay group and a school pay group, wouldn't there need to be 2 separate employee records, and therefore 2 W-2's?

[NeilZ]

I had set up 2 SS & 2 Medicare tax items, one posting to fund 1 payroll tax expense and the other posting to fund 2 payroll tax. Our plan was to use the 2 separate funds just for income and expense reporting and have all assets and liabilities in fund 1. However, to test I had set up the church items posting to checking account in fund 2, and I thought I had done the same with the liability, but maybe not. I still don't see how you would point the fund 2 salary (income) items to use the correct SS & Medicare items for fund 2.

Again, you cannot as the system expects to process income coming out of one fund.

In addition, if there are separate checks printed for employees that have wages allocated to both church and school, I see a couple possible problems with that. First, won't the system under-withhold for federal and state income tax withholding, since it won't be calculating on their total pay per pay period. Secondly, in order to set up employees with a church pay group and a school pay group, wouldn't there need to be 2 separate employee records, and therefore 2 W-2's?

You would have to setup two separate employee records, this is the only way you're going to get this to work. Once for the church, and one for the school.

The system should not underwithhold, but if it appears that it is, I would have an extra amount equal to the amount not withheld as a voluntary withholding.

As far as the W-2s, you really don't have much of a choice unless you manually update the W-2 prior to printing.

As I said, you have an unusual situation where you're paying the same employee from two separate funding sources, I've not seen this come up previously on these forums, and as such, all we can do is float ideas for you to try.

I would setup a testing instance of Powerchurch (you can install to a completely separate drive and directory for this) and do some tests using a backup of the live database. This way you can see what the results of the various suggestions may do.

I wish I had a better answer. That said, if someone else has any ideas, please step in with those suggestions.