Adjustment Pays#
This document describes the set up and the UPCALC processing for Adjustment Pays for US Symmetry Taxation.
Set Up#
IMLN #
The lexicon X_PAY_CATEGORY_TYPE determines which type of category the pay will be calculated with.- 1 - Reversal
- 2 – Adjustment - this Category Type is used for Adjustment pays
- 3 - Regular Pay
- 4 - Future Pay
- 5 - Advance
- 6 - Bonus
- 7 - Retro
- 8 - Open Enrollment
IPPGU – Define US Pay Categories for Adjustment#
On IPPGU, user can enter one or more Pay Category Code with Pay Category Type = ‘Adjustment’.
The Pay Point Set is user definable and must be set up on IPPP screen
The IPPGU Federal, State, Local, Railroad Tax methods may be overridden to ‘Do Not Calculate’
For US Symmetry Taxation, it is recommended to leave these Tax methods as blank so that when the Symmetry Taxation is called, the Taxable Earnings can be adjusted for Adjustment pays
IPPP – Define Pay Points for Adjustment#
On IPPP screen, user can enter one or more Pay Point Set to be used for IPPGU for Adjustment pays.
(1) Some Adjustments are for YTD numeric corrections only and will not require additional processing, therefore one Pay Point Set can be set up for these kind of Adjustments, there is no need to set up the Pay Point Type entry
(2) Some Adjustments are for Earnings or Benefits corrections that may require additional processing by User Calc or to fix some Taxable Earnings, therefore a Pay Point Set can be set up for these kind of Adjustments, the Pay Point Type entries must be set up
UPCALC only processes the following Pay Point Type and Pay Point Task for Adjustment pays:
- Pay Point Type = 94 - Adjustment
- Pay Point Task = User Calculation (optional, used only if user calcs are needed)
- Pay Point Task = Legislative Calc
Multiple Pay Point Type entries can be set up for User Calc, but only one Pay Point Type entry can be set up for ‘Legislative Calc’ to perform Symmetry Taxation to adjust the Taxable Earnings
Adjustment Examples#
There are many scenarios users are required to perform Adjustments to correct the YTD amounts. Adjustment pay has no money involvement and does not affect the Net Pay, it is strictly to correct YTD amounts. Depending on the business scenarios, user may need to perform Adjustments in different manner by setting up User Calc or to perform Legislative Calculation. The followings are some examples of the Adjustment pays.
IPPH – Negative 125 / 401K Adjustment#
On IPPH, taxable benefits such as 125 / 401K amounts can be entered as negative amounts to refund from YTD, the 125 / 401K can also be generated from Usercalc with negative amount to refund from YTD
IPPH Category ADJUSTMENT points to a Pay Point Set with IPPP entry Pay Point Task = ‘Legislative Calc’, therefore UPCALC will perform Symmetry taxation with Pay Header’s Work and Home Jurisdiction
With the negative 125 plan / 401K amounts, Symmetry will reduce the Taxable Earnings with the negative amounts and returns all Subject Earnings that are topped up with the refunded benefit amounts according to the Work / Home Jurisdictions
UPCLOZ will update the YTD with these amounts, after UPCLOZ, when employee is paid with the next Regular pay, the ‘Self-Adjust’ method will adjust FICA, MEDI, FUTA, SUTA etc deductions according to these adjusted YTD Earnings
IPPH –Positive 125 / 401K Adjustment#
On IPPH, taxable benefits such as 125 / 401K amounts can be entered as positive amounts to be added to YTD, the 125 / 401K can also be generated from Usercalc with positive amount to be added to YTD
IPPH Category ADJUSTMENT points to a Pay Point Set with IPPP entry Pay Point Task = ‘Legislative Calc’, therefore UPCALC will perform Symmetry taxation with Pay Header’s Work and Home Jurisdiction
With the positive 125 plan / 401K amounts, Symmetry tries to reduce the Earnings with the positive benefit amounts, since there is no earnings in current pay, the positive benefit amounts will result in negative earnings, and Symmetry does not allow for negative earnings, therefore returns all Subject Earnings as zero
Symmetry will not adjust the Subject Earnings in this scenario, below is the result after Symmetry is called
To remedy this situation, UPCALC has internal logic to derive hypothetical earnings to cover the benefit deductions so that Symmetry can calculate the Subject Earnings according to the Work / Home Jurisdictions
After Symmetry results are returned, the Subject Earnings are reduced by the hypothetical earnings in order to store the correct Subject Earnings
UPCLOZ will update the YTD with these amounts, after UPCLOZ, when employee is paid with the next Regular pay, the ‘Self-Adjust’ method will adjust FICA, MEDI, FUTA, SUTA etc deductions according to these adjusted YTD Earnings
IPPH – Earnings Adjustment only#
An employee was incorrectly paid $100 under Supplemental pay but it should be paid under Regular pay
On IPPH, Regular pay PC can be entered as positive amounts
On IPPH, Supplemental pay PC can be entered as negative amounts
After Symmetry results are returned, the Subject Earnings are stored so that UPCLOZ will correct YTD Subject Earnings
Both Reg and Sup earnings are subject to FICA, MEDI, FUTA Earnings but there is no affect on FICA, MEDI, FUTA because Reg $100 and Sup -$100 adds up to zero, therefore there is no affect
IPPH – Earnings with Benefits Adjustment#
An employee was incorrectly paid for Regular Pay, Supplemental Pay, 125 and 401K
On IPPH, Regular pay PC can be entered as positive or negative amounts
On IPPH, Supplemental pay PC can be entered as positive or negative amounts
125 plan and 401K can be entered as positive or negative amounts
After Symmetry results are returned, the Subject Earnings are adjusted and stored so that UPCLOZ will correct YTD Subject Earnings
IPPH – Positive Earnings Adjustment#
An employee was incorrectly paid $100 under Supplemental pay which should not have been paid
This employee was missed $200 under Regular pay which should have been paid
On IPPH, Regular pay PC can be entered as positive amounts $200
On IPPH, Supplemental pay PC can be entered as negative amounts - $100
The net result is that the Earnings is with a positive amount
Both Reg and Sup earnings are subject to FICA, MEDI, FUTA Earnings, because Reg $200 and Sup -$100 adds up to $100, therefore FICA, MEDI, FUTA Earnings are adjusted with $100
UPCLOZ will update the YTD with these amounts, after UPCLOZ, when employee is paid with the next Regular pay, the ‘Self-Adjust’ method will adjust FICA, MEDI, FUTA, SUTA etc deductions according to these adjusted YTD Earnings
IPPH – Negative Earnings Adjustment#
An employee has been overpaid with Regular pay by $200 and Supplemental pay by $100
On IPPH, Regular pay PC can be entered as negative amounts -$200
On IPPH, Supplemental pay PC can be entered as negative amounts - $100
Both Reg and Sup earnings are subject to FICA, MEDI, FUTA Earnings, because Reg -$200 and Sup -$100 adds up to -$300, therefore FICA, MEDI, FUTA Earnings are adjusted with $300
UPCLOZ will update the YTD with these amounts, after UPCLOZ, when employee is paid with the next Regular pay, the ‘Self-Adjust’ method will adjust FICA, MEDI, FUTA, SUTA etc deductions according to these adjusted YTD Earnings
IPPH – Negative Earnings and Benefits Adjustment#
An employee has been overpaid for Regular pay, Supplemental pay, 125 plan, 401K
On IPPH, Regular pay PC can be entered as negative amounts
On IPPH, Supplemental pay PC can be entered as negative amounts
On IPPH, 125 plan and 401K can be entered as negative amounts
Both Reg and Sup earnings are subject to FICA, MEDI, FUTA Earnings, the negative 125 and 401K are applied to to FICA, MEDI, FUTA Earnings, therefore FICA, MEDI, FUTA Earnings are adjusted
UPCLOZ will update the YTD with these amounts, after UPCLOZ, when employee is paid with the next Regular pay, the ‘Self-Adjust’ method will adjust FICA, MEDI, FUTA, SUTA etc deductions according to these adjusted YTD Earnings
Input Adjustment Amount#
IPPH – Enter Pay Component Adjustment Amounts#
The user can manually enter any Pay Component Adjustment with a Positive or Negative Amount, e.g. 125 plan, 401K, FIT Tax, FICA ER, FIT Earn, FICA ER Earn and so on
The Pay Line Detail Tab Action is used to determine if the input amount should be Accumulate or Replace
By default, this pay line detail amount is accumulated into the pay component after Symmetry is called, e.g. if the input FIT Earn = 444.44 and Symmetry returns FIT Earn = 25, then FIT Earn = 469.44
If FICA ER Action = ‘Replace’, then the pay component input amount is used, e.g. FICA ER = 8.25
The pay line detail Action ‘Accumulate’ or ‘Replace’ is only used for this current pay in order to come up with the correct amount and display on the Pay Register, UPCLOZ will always accumulate the Pay Register amounts into YTD amounts
The PAY JURISDICTION Tab shows all Tax Identifiers that are returned by Symmetry, the user input amounts are also recorded with the correct Tax Identifiers
UPCLOZ will update the YTD with these adjustment amounts, after UPCLOZ, when employee is paid with the next Regular pay, the ‘Self-Adjust’ method will adjust FICA, MEDI, FUTA, SUTA etc deductions according to these adjusted YTD Earnings
UPCALC Processing#
Pay Header – Work / Home Jurisdiction processing#
The Pay Header’s Work Jurisdiction and Home Jurisdiction GNIS codes are used to call Symmetry to calculate taxes
UPCALC only processes the following Pay Point Type and Pay Point Task for Adjustment pays:
- Pay Point Type = 94 - Adjustment
- Pay Point Task = User Calculation
- Pay Point Task = Legislative Calc
For Adjustment pays, if the total earnings are negative or the total benefits are positive, UPCALC internally derive a hypothetical earnings to cover these negative amounts so that Symmetry can calculate the tax
After Symmetry returns all tax Identifiers, since there is no money involvement in Adjustment pay, the tax amount is ignored, the Subject Earnings are reduce by the hypothetical earnings and stored, these tax identifiers are displayed on IPPH PAY JURISDICTION Tab
