Employee allocation method

Pay codes, Employee pay codes, Employee position allocation

Select how payroll will distribute the employee's portion of the pay code amount. The employee's portion will use the employee allocations from the employee position or the employee pay code to allocate the pay code amount. If the allocations on the employee position aren't set up, then the pay code will use the allocations on the employee pay code.

For example, an employee works in administration but the employee's wages are charged (allocated) to several accounts in the general fund and utility funds.

You can use the employee allocation method to choose which allocation method the pay code will use to allocate the pay code amounts at the pay code level, the employee pay code level, or the employee position level.

There are four options:

Do not allocate pay code amount. Use the GL account from the employee pay code to create transactions. Usually, this option is for pay codes that calculate employer paid benefits, state taxes, and federal taxes.
Override with employee allocations. Ignore the GL account that is set up on the employee pay code and use the GL account(s) from the employee position allocation to create transactions. Use this option when you're using complete GL account(s) instead of using partial account(s) in the employee allocations.
Use employee allocations to allocate pay code amount. Use this option when you're using partial account(s) in the employee allocations. For example, regular pay (1-00) uses the employee allocations to send an amount to a savings account, a retirement account, a health savings plan, and so on. Most pay codes will use this option.
Use transactions to allocate pay code amount. Use this option to use the partial account(s) on the employee pay code to use the amounts on the employee's check to create transactions.

Payroll will use the employee allocation method on the pay code at the organization level to process the pay code unless the employee pay code has a different employee allocation method.

The option to override employee allocations is included in the 2023.02 release.

Do not allocate pay code amount

The pay code amount uses the specified GL account from the pay code to as the GL account. The pay code will not use the allocations from the employee pay code or employee position pay code.

Organization > Pay Codes

Override with employee allocations

This option is only available in the employee portion.

Ignore the GL account that's set up on the employee pay code (Modify Existing Employees) and use the GL account from the employee position allocation.

Override employee pay code GL account with the GL account from the employee position allocation

More...

Override with employee allocations will create employee transaction records based on the employee position allocation percent. It will use the full GL account from the employee position allocation. A partial GL account is not allowed. This option will split the amount, units, and hours based on the employee position allocation. It will start with the lowest percentage and then use the next lowest percentage until the amount, units, and hours have been calculated for each percentage listed in the employee position allocations grid. Anything that's leftover will be allocated to the allocation with the highest percentage.
Override with employee allocation will create a separate employee transaction record for each allocation as long as the allocation percent is greater than zero.
Error: Pay code amount was not fully allocated. GL allocation percentages do not equal 100%. This error displays when the employee position allocation total does not equal 100%. Open Modify Existing Employees > Positions tab > Allocations tab and update the allocations so the allocation total equals 100%.
Error: The GL account is invalid. You'll see this error when an allocation on the employee position is using an invalid GL account. Start by checking the GL account in the employee position allocation is entered correctly. Next, check if the General Ledger interface is set up on the Interfaces tab > General Ledger tab in the Payroll > Organization > Organization. Last, check if the GL account is set up as an account in Connect General Ledger (General Ledger > Account Inquiry).
Error: Employee allocation method does not match allocation setup. GL accounts may not be assigned as expected. Please review the allocation GL accounts for the employee position. Open the employee position in Modify Existing Employees > Positions tab > Allocations tab and the GL accounts are set to use partial accounts. A partial account uses a mask, like this FF-DD-130. If the employee position allocation is using a complete GL account, Connect can only create transactions in the GL account instead of using a partial account to create transactions using the fund and department.

Use employee allocations

Use the employee allocations from the employee position pay code to complete the GL account. Do not use the employee allocations from the employee pay code (Modify Existing Employees > Pay Codes tab). The employee position pay code is located on the Positions tab > Allocations tab in Modify Existing Employees.

Use employee allocations uses the employee position pay code

More...

If there is a complete or partial GL account in the employee position allocation, it will override the complete or partial GL account on the pay code.

Use transactions

Use the GL information from the gross pay codes on the check to calculate the percentage of the deduction pay code for each GL account.

For example, health insurance is split based on the percentage each gross type pay code contributes to the gross pay total. Which means the employee allocation method on a health insurance pay code is set to use transactions and the GL account is set to use a partial GL account (FF-OO-130). When the pay code calculates it will calculate the deduction for each gross type pay code and create a transaction to deduct the calculated amount in the FF-OO-130.

Example of calculating health insurance using transactions

First, the pay code divides the gross pay code amount by the gross pay total to calculate a percentage. It does this calculation for each gross pay code on the check. In this example there is a gross type pay code for regular pay, vacation pay, and sick pay.

[Gross Type Pay Code Amount] / [Gross Pay Total Amount] = Percentage of Gross Pay

$2,752 / $3,440 = 80%

$430 / $3,440 = 12.5%

$268 / $3,440 = 7.5%

Second, the pay code multiples the gross type pay code amount by the percentage to find the deduction amount.

[Gross Type Pay Code Amount] x [Percentage of Gross Pay] = Deduction Amount

[Regular Pay] x 80% = $48.60

[Vacation Pay] x 12.5% = $7.75

[Sick Pay] x 7.5% = $4.65

Last, the pay code creates a transaction using the partial GL account to deduct the amount.

10-44-130, $48.60-

10-50-130, $7.74-

10-54-130, $4.65-

This is what it might look like...

	Gross pay	Calculation	Deduction Amount	GL Account
Total gross pay	$3,440	[Gross Type Pay Code Amount] x [Gross Pay Total Amount] = Percentage of Gross Pay
Regular pay	$2,752	$2,752 / $3,440 = 80%
Vacation pay	$430	$430 / $3,440 = 12.5%
Sick pay	$268	$268 / $3,440 = 7.5%

Health insurance		[Gross Type Pay Code Total] x [Percentage of Gross Pay] = Deduction Amount		FF-OO-130
Health insurance, 60-01		[Regular Pay] x 80% = $49.60	$48.60-	10-44-130
Health insurance, 60-01		[Vacation Pay] x 12.5% = $7.75	$7.75-	10-50-130
Health insurance, 60-01		[Sick Pay] x 7.5% = $4.65	$4.65-	10-54-130

202211, 2022Sep28