Certified payroll set up

Warning: Certified payroll requirements are specific to each customer. The steps below have not been reviewed by our Quality Assurance department but are frequently used by internal and external customers with success. For additional information on how to customize a certified payroll and related reports, please contact your certified Sage consultant.

Set up jobs for certified payroll:

1. In Job Cost, from the Setup menu, select Jobs.
2. Enter the job ID in the Job box and press ENTER twice.
3. Click the Scope and PR tab.
   Note: If you use Equipment Cost, click the Scope, PR, and EQ tab.
4. In the Payroll daily entry control box, select Certified job, require daily entry.
5. Click Save.
6. Repeat steps 2 through 5 for each certified job.
7. Click Close.

After you complete steps 1 through 7, when you enter time to a certified job in Payroll, an Hourly Distribution box appears when you select the Units column. The Hourly Distribution box allows you to type in the hours worked for each day in the pay period.

Note: If you have a Date column on your timesheet view, the Hourly Distribution box does not appear when you enter weekly or biweekly time to a certified job. When you use the Date column, you enter the hours worked that day in the Units column.

Set up certified classes:

1. In Payroll, from the Setup menu, select Certified Classes.
2. Type a certified class ID in the Certified Class box and press ENTER.
3. Type in a description for the certified class in the Description box and click Accept line.
4. Repeat steps 2 and 3 for each certified class.
5. Click Accept table.

Set up Pay Rate Tables:

1. In Payroll, from the Setup menu, select Other Tables, Pay Rate Tables.
2. Type CERTIFIED and press ENTER.
   Note: Only a Rate table named CERTIFIED allows you to report with Sage standard certified payroll reports.
3. Type a Description for the table and press ENTER.
4. Enter your hourly pay ID in the Pay ID box and press ENTER.
5. Select only the following Table column check boxes:
   • Job
   • Certified Class
   • Certified?
6. Click Table.
7. Enter a certified job in the Job column.
8. Enter a certified class in the Certified Class column.
9. Select the Certified check box.
   Note: The Certified check box must be marked in order for a line to automate a certified entry when you enter time.
10. Type in the Rate and Fringe Rate amounts specific to the Job, Certified Class, and any other columns you selected in step 6.
11. Repeat steps 7 through 10 for each job and certified class combination.
12. Click Accept table, Save and Close.

Set up certified fringes:

1. In Payroll, from the Setup menu, select Fringes.
2. Enter the Fringe ID and press ENTER twice.
3. Select the Certified fringe check box.
4. Select the Benefit Type from the drop down list and click Save.
5. Repeat steps 2 and 3 for each certified fringe and click Close.

Set up a cash fringe pay:

1. In Payroll, from the Setup menu, select Pays.
2. Type a Pay ID for the cash fringe and press ENTER. The Pay ID can be custom to your setup.
3. Type in a Description for the cash fringe and press ENTER.
4. In the Pay type box, select Cash Fringe.
5. In the Calc Method box, select Formula.
6. In the Formula box, click List, and click PR Formulas.
   Note: If PR Formulas is not available, you are in the correct list of formulas. Continue with the next step.
7. Select PR Cash Fringe Rate and click OK.
8. Review the rest of the cash fringe setup and make any selections. No other selections are required for the cash fringe but can affect other aspects of your payroll.
9. Click Save and click Close.

The PR Cash Fringe Rate formula uses the PR Paid Cert Fringe Rate formula in the calculation of the cash fringe. This is the standard formula for a cash fringe. If you choose not to change this formula, continue with F. Employees. To review the details of the standard formula and the 2 additional formulas that you can use instead of the PR Paid Cert Fringe Rate formula, continue with E. Formulas.

Set up a cash fringe rate formula:

PR Cash Fringe Rate

IF(Certified [PR Time] = Yes AND Pay Type [PR Time] = "REG", Units [PR Time] * MAX((PR Rate Table Base Rate [PR Formula] + PR Rate Table Fringe Rate [PR Formula]) - (Rate [PR Time] + PR Paid Cert Fringe Rate [PR Formula]), 0), IF(Certified [PR Time] = Yes AND Pay Type [PR Time] = "OT", Units [PR Time] * MAX((PR Rate Table Base Rate [PR Formula] + PR Rate Table Fringe Rate [PR Formula]) - (Rate [PR Time] / LOOKUP (Factor [PR Pay], Pay ID [PR Time]) + PR Paid Cert Fringe Rate [PR Formula]), 0), 0))

PR Paid Cert Fringe Rate

This formula divides the certified fringes by yearly hours based on a 40 hour work week.

Certified Fringes [Tax Calculation Variable] * Pay Periods [PR Check] / 2080

Example based on one hour of pay: An employee has an hourly rate of $25 and works on a job that requires $5 of certified fringes. The employer provides one fringe benefit – H&W fringe. The fringe is calculated at $1.20 during the pay period. The system will take the $1.20 X 52 (pay periods for the year) = $62.40. This is then divided by 2080 (hours worked for a year) = $.03. Since the required amount is $5.00 and the cash fringe rate is $.03, the cash fringe pay amount will be $4.97 for the one hour of pay.

Note: Since this formula is based on the assumption of a 40-hour work week, if the employee works less than that, the cash fringe will appear too high and if the employee works more than 40 hours it will appear too low. However, it will average out over the course of the job.

Paid Cert Fringe Rate2

This formula calculates certified fringes based on actual hours worked in current pay period.

Certified Fringes / (Regular Hours [PR Check] + Overtime Hours [PR Check])

Example based on one hour of pay: An employee has an hourly rate of $25 and works on a job that requires $5 of certified fringes. The employer provides one fringe benefit – H&W fringe. The fringe is calculated at $2.90 during the pay period. The system will take the $2.90 divided by 1 (regular and overtime hours worked in the pay period) = $2.90. Since the required amount is $5.00 and the cash fringe rate is $2.90, the cash fringe pay amount will be $2.10 for the one hour of pay.

Paid Cert Fringe Rate3

This formula calculates certified fringes based on certified hours worked in the current pay period.

Certified Fringes / LOOKUP (Units [PR Check Pay], Employee [PR Check], Period End Date [PR Check], Check Sequence [PR Check], "CERTUNITS")

For the Paid Cert Fringe Rate3 formula to work, the following steps are required:

1. Create a formula named Total Cert Units in the following format:
   IF ((Pay Type [PR Time] = "Regular" OR Pay Type [PR Time] = "Overtime") and Certified [PR Time] = Yes, Units [PR Time])
2. Set up a Pay ID of CERTUNITS with a Pay Type of Accrual. Select the Units check box and select a Calc Method of Formula. List the Total Cert Units formula into the Formula box.
3. Add the Pay ID CERTUNITS to the [Pays] in each Employee setup that works on certified jobs. Select the Auto check box on the CERTUNITS line. CERTUNITS must be sequenced to calculate prior to the cash fringe, either by putting sequence numbers on the employee pay records or by giving it an ID that precedes the cash fringe pay ID alphanumerically.

Example based on 15 hours of pay: (10 certified, 5 non-certified): An employee has an hourly rate of $25 and works on a job that requires $5 of certified fringes. The employer provides one fringe benefit – H&W fringe. The fringe is calculated at $20 during the pay period. After processing, the CERTUNITS pay ID returns a value of 10 (certified hours worked this pay period). The system will take the $20 divided by 10 = $2.00. Since the required amount is $5.00 and the cash fringe rate is $2.00, the cash fringe pay amount will be $30.00 or $30 for 10 hours.

If you choose to use either PR Cert Fringe Rate2 or PR Cert Fringe Rate3 formulas, you will need to copy and rename both the PR Cash Fringe Rate formula and either the PR Cert Fringe Rate2 or the PR Cert Fringe Rate3 formula to your Public Formulas. The renamed PR Cash Fringe Rate formula will need to be modified to replace PR Paid Cert Fringe Rate [PR Formula] with the Certified fringe rate formula you have chosen to use. Additionally, if you created a Pay ID other than CERTUNITS in step 2 of Paid Cert Fringe Rate3 set up, you must use that Pay ID rather than CERTUNITS in your public formula.

Set up employees:

1. In Payroll, from the Setup menu, select Employees.
2. Enter an employee ID in the Employee box and press ENTER twice.
3. Select the Entry Info tab and enter the employee's certified class in the Certified class box.
4. Click Pays.
5. In the next available Pay ID box, enter the cash fringe Pay ID from step D2.
6. Select the Auto check box and click Accept Line.
   Note: If you completed the additional set up to use the CERTUNITS pay in section E, repeat steps 5 and 6 for CERTUNITS.
7. Click Accept table and click Save.
8. Repeat steps 2 through 7 for each employee who works on a certified job.
9. Click Close.

Note: Bi-weekly certified payroll differs from weekly certified payroll primarily in workflow, not setup. For bi-weekly certified payroll you must enter time with bi-weekly period end dates, print a bi-weekly certified report (Reports, Other, Bi-Weekly Certified Report), and have the pay group set up appropriately.

DocLink: How do I set up a certified class in Payroll?
Attachment: 347_20230425115001_Certified Payroll Setup.pdf