How to record costs for company-owned vehicles used by employees

Recording costs for employee use of company-owned vehicles in Sage 100 Contractor.

Complete these steps before archiving or closing the payroll year in December.

Create a payroll calculation for the vehicle allowance

1. Open 5-3-1 Payroll Calculations.
2. In the data control box, assign a number to the new calculation.
3. In the Description box, type Vehicle Allowance.
4. From the Tax Type list, select 0-None, then press Enter.
5. From the Calculation Type list, select 4-Add/Deduct (taxable).
6. From the Calculation Method list, select 18-Variable (manual calc).
7. Leave the Based On, Default Rate, Default Max, and Max Type fields blank.
8. In the Job Expense box, enter a Direct Expense range account.
9. In the Shop Expense box, enter an Equip/Shop range account.
10. In the Overhead Expense box, enter an Overhead Expense range account.
11. In the Admin Expense box, enter an Administrative Expense range account.
12. In the Credit Account box, enter the same overhead expense account from Step 10.
13. Verify the tax box selection in the Subject to section.
14. In the W-2 Box, type 14.
15. In the W-2 Code box, type a benefit description, for example, Auto Use.
16. Click File, Save.

Create a payroll record for employees using a company vehicle

1. Open 5-2-2 Payroll Records.
2. In the Employee box, select the employee.
3. In the Period Start box, enter the start date.
4. In the Period End box, enter the end date.
5. In the Check Date box, enter the check date used for reporting.
6. In the Check# box, type 9999.
7. In the Payroll Type box, select 1-Regular.
8. In the Quarter box, enter the quarter that matches the check date.
9. In the State box, enter the two-letter state abbreviation.
10. In the Salary box, enter the vehicle allowance amount.
11. Click File, Save.

Adjust calculations and compute payroll

1. Open 5-2-3 Compute Payroll,
2. Click Trial Computation.
3. Click Compute.
4. Open 5-2-2 Payroll Records and display the saved record.
5. Clear the Salary box amount.
6. Click the Calculations tab.
7. Add the Vehicle Allowance calculation in the Calculation column.
8. Enter the vehicle allowance amount in the Amount column.
9. In the Override column, enter Yes.
10. Clear the Federal Income Tax amount in the Amount column.
11. Add all the Deduct from Employee trial-computed amounts from the Calculations tab.
12. In the Federal Income Tax Amount column, enter the total as a negative value.
13. Enter Yes in the Override column for all rows.
14. Click File, Save.

The net pay for this record is $0.00.
The transaction increases the vehicle allowance, employee Social Security and Medicare, and employer payroll costs.
The transaction decreases Federal Income Tax to offset employee Social Security and Medicare withholding.

Finalize and post payroll

1. Open 5-2-3 Compute Payroll and run Final Computation.
2. Open 5-2-2 Payroll Records and display the final-computed record.
3. Open 5-2-6 Post Payroll to GL and post the record to the correct accounting period.
4. Open 5-3-7 Payroll Audit and click Repair to recalculate employee totals.