How do I record costs for an employee's company owned vehicle?

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
5. Press Enter
6. From the Calculation Type list, select 4-Add/Deduct (taxable).
7. From the Calculation Method list, select 18-Variable (manual calc).
8. Do not enter information into the Based On, Default Rate, Default Max, or Max Type fields.
9. In the Job Expense box, enter an account in the Direct Expense range.
10. In the Shop Expense box, enter an account in the Equip/Shop range.
11. In the Overhead Expense box, enter an account in the Overhead Expense range.
12. In the Admin Expense box, enter an account in the Administrative Expense range..
13. In the Credit Account box, enter the same overhead expense account selected in Step 11 above.
14. Review the Subject to section to ensure the correct tax boxes are selected.
15. In the W-2 Box type 14.
16. In the W-2 Code box, type a description for the benefit (for example, "Auto Use")
17. Click File, Save

Create a 5-2-2 Payroll Record for each employee using a company vehicle (This payroll entry can be entered on a weekly, bi-weekly, monthly, quarterly, or annual basis)

1. Open 5-2-2 Payroll Records.
2. In the Employee box, select the applicable employee.
3. In the Period Start box, enter the date.
4. In the Period End box, enter the date.
5. In the Check Date box, type the check date.  The check date is used for reporting purposes on transaction-based reports.
6. In the Check# box, type 9999.
7. In the Payroll Type box, select 1-Regular.
8. In the Quarter box, type the quarter corresponding to the check date.
9. In the State box, enter the two-letter state abbreviation.
10. In the Salary box, enter the amount of the vehicle allowance.
11. Click File, Save
12. Open 5-2-3 Compute Payroll, Trial Compute
13. Open 5-2-2 Payroll Records and display the record you saved in Step 11.
14. Clear the amount from the Salary box.
15. Click the Calculations tab.
16. Enter the Vehicle Benefit calculation you created earlier and type the amount in the Amount column.
17. In the Override column, type Yes.
18. Remove the value in the Federal Income Tax amount box.
19. Add all of the Deduct from Employee items that are trial computed on the Calculations tab of the Payroll Record.
20. In the Amount column of the Federal Income Tax calculation, type the amount you added together, from step 19, as a negative value.
21. In the Override column, enter Yes on all rows.
22. Click File, Save
    • The net pay for this transaction is $0.00. This transaction increases the Add/Deduct calculation for the value of the vehicle allowance, the withholding for Employee Social Security and Medicare, and the associated employer costs. This transaction decreases Federal Income Tax to offset the adjustments made for Employee Social Security and Medicare.
23. Open 5-2-3 Compute Payroll and Final Compute the record.
24. Open 5-2-2 Payroll Records and display the record you final computed.
25. Open 5-2-6 Post Payroll to GL and post the record as usual.
26. Open 5-3-7 Payroll Audit and click Repair to recalculate employee totals.