Fringe Example - Flat Amount for Health Club

This topic describes how to set up a fringe benefit for health club dues to be paid through the optional Vendor Invoices and Checks feature. In this example, the employee pays the same amount every pay period and the employer pays a matching amount for each employee.

To set up a fringe using Fringe Calculation Code 1 (Flat Amount) for the employer's portion, you need to set up a Deduction Code for the employee's portion and a Fringe Number for the matching employer's portion. The Payroll Post program uses the Deduction Code assigned to the employee during Employee Master Maintenance.

Tips:

For more information, refer to Understanding Fringe Benefits and Understanding Vendor Invoices and Checks.
This example depicts how to use Fringe Calculation Code 1 - Flat Amount, which directs the Payroll Post to calculate the same flat amount each pay period and to enter the value into the Employee Fringe file for the employer.

Directions for Setup:

Normally, you only have to perform the following maintenance once.

Fringe Master Maintenance: Create a Fringe Number for the employer's matching contribution. To see instructions, click More.
- Fringe Number: 011 (Create a separate Fringe Number for each Fringe Benefit.)
  Tip: Avoid using reserved Fringe Numbers. For more information, see the Standard Fringe Numbers and Deduction Codes topic.
- Standard Fringe Amount: 0.00 (Leave zero because the Payroll Post calculates the amount, which is the same as the deduction amount calculated during Payroll Entry.)
- Vendor Number: 8800 (Enter the Vendor Number assigned to the health club.)
- Standard Fringe Calculation Code: 1 - Flat Amount (Payroll Post automatically enters the calculated deduction amount into the Employee Fringe File).
- Vendor Payment Method: I (I = pay via Fund Accounting; C or CN = pay via Payroll A/P, N = pay manually/bypass Vendor Invoices and Checks.)
Example: Fringe Master Maintenance pertinent fields...
Deduction Master Maintenance: Create a Deduction Code for the employee's portion. To see instructions, click More.
1. Deduction Code: 333 (Although not depicted in this example, it is often convenient to make the Deduction Code the same as the Fringe Number.)
  Tip: Avoid using reserved Deduction Codes. For more information, see the Standard Fringe Numbers and Deduction Codes topic.
2. Vendor Number: 8800 (Enter the Vendor Number for the health club, usually the same as the Vendor Number for the fringe in Step 1.)
3. Vendor Payment Method: I (I = pay via Fund Accounting; C or CN = pay via Payroll A/P, N = pay manually/bypass Vendor Invoices and Checks.)
4. Standard Amount: 33.00 (Enter the default amount that applies to most employees. You can override this amount when you assign the deduction to an employee. Enter 0.00 if the amount is different for each employee.)
5. Fringe Number: 011 (Link to the Fringe Number from Step 1 for the employer's portion.)
Example: Deduction Master Maintenance pertinent fields...
Employee Master Maintenance: Assign the Deduction Code to the employee in the Employee Master Scheduled Deductions Area. To see instructions, click More.
- Deduction Code: 333 (Select the Deduction Code created in Step 2.)
- Deduction Amount: 33.00 (Accept the default from the Deduction master or enter a flat amount specific to this employee. This amount is to be withheld from the employee's paycheck every pay period. The employer's Fringe Amount will match this amount.)
- Deduction Method: 1 - Flat (The same specified amount is withheld each pay period.)
Example: Employee Master Maintenance pertinent fields...
Employee Fringe Maintenance: Assign the Fringe Number to the Employee. To see instructions, click More.
1. Fringe Number: 011 (Enter the Fringe Number from Step 1.)
2. Fringe Calculation Code: 1 - Flat Amount (Use the default value from the Fringe master in Step 1.)
3. Clear Flag: 1 - Clear Amounts Only (1 is most common, 0 is acceptable.)
4. Amounts & Department Numbers: Leave all of the distribution amounts and Department Numbers blank. Payroll Post fills in these fields.
  Note: If you are not using the Payroll Post automatic update, you must enter the Fringe Amount here.
Example: Employee Fringe Maintenance pertinent fields...
Auto Fringe Distribution Maintenance: The Payroll Post uses this cross-reference to link Appropriations Account Numbers (expense accounts) to Department Numbers. To see instructions, click More.
Enter a separate line for each Department Number that is associated with a Fringe.
1. Fringe Number: 11 (Enter the Fringe Number from Step 1 for each line.)
2. Account #: Enter the Department Number for every employee who is enrolled in the health club.
  Tips:
3. To see the Department Numbers assigned to an employee, refer to the Employee Information Area and the Pay Distribution Area in Employee Master Maintenance. Be sure to include lines for all departments assigned to an employee.
4. If a Department Number is missing from this file, the Payroll Post automatically creates a record with the employee's primary Department Number and enters the default Fringe Account Number/expense account (99999999) in the Employee Fringe file. The Fringe Distribution Post will not run if there are Fringe Account Numbers (expense accounts) for 99999999.
5. If you create any new Department Numbers and assign them to existing or new employees, you must add the new Department Numbers here.
1. Fringe Account #: Enter the Appropriations Account Number (expense account) used for the Vendor Invoices and Checks transaction.
  Note: The Fringe Account # (expense account) is sometimes the same as the Account # (Department Number).
Example: Auto Fringe Distribution Maintenance pertinent fields...

Directions for Confirming the Setup:

You can see the results of the setup in the following programs.

Payroll Check Entry: To see an example, click More.

In the Scheduled Deductions Area, you can see the flat amount withheld from the employee's paycheck.

Example: Payroll Check Entry pertinent fields...
Employee Fringe Maintenance: To see an example, click More.

After the Payroll Post runs, you can see the distributed amount of the employer's portion to be paid to the vendor. Do not make any changes.

Note: In this example, the employee's paycheck amount was expensed to multiple departments by percentage. The Fringe Amount is distributed to two departments in the same ratio as the employee pay is distributed during Payroll Check Entry.

Example: Employee Fringe Maintenance pertinent fields...
Invoice Transactions: To see an example, click More.

After running the Fringe Distribution Post, you can see the amounts for the deduction and the fringe on the appropriate invoice transaction report. If you make payments via Accounts Payable in the Fund Accounting module, see the PR F/A Invoice Transaction Journal. If you make payments within Payroll using the Payroll Accounts Payable feature, see the PR A/P Check Report.

Note: In this case, the Fringe Amount is distributed to two departments in the same ratio as the employee pay is distributed during Payroll Check Entry. The amounts total up to $33.00.

Example: