Appendix C - Payroll Total Codes

 

Overview

Understanding total codes will make the Payroll installation a much easier task, as they are required in most areas of the payroll definition. As a payroll becomes more complex, new total codes may be defined to cover the many situations that arise. Refer to the Contribution, Deduction, Pay, Tax, and Total Code Maintenance tasks either in this documentation or on your terminal while studying total codes.


Total Code Definition

As described in the Total Code Maintenance task, total codes identify accumulators that are used during payroll calculation. These accumulators store intermediate results during the payroll calculation and become the basis on which subsequent calculations are made.


Total Code in Pay Code Maintenance

In the definition of pay codes, there are multiple fields for specifying total codes at the bottom of the screen. Each of these total codes (up to 10) accumulates the earnings for each employee during the Payroll Calculation process. These are output or "Total To" code designations.


Total Codes in Contribution, Deduction, and Tax Code Maintenance

In the definition of contribution, deduction, and tax codes, there are two different areas where total codes may be entered. The Total Code entry in the upper section of the screen specifies the total code that has accumulated employee earnings on which contributions, deductions, or taxes are to be based.

 

The definition for contribution, deduction, pay, and tax codes also allows a second total code entry in the lower section of the screen. This entry is an output or Total To code designation. The deduction, contribution, pay, or tax dollar amount resulting from payroll calculation is then added (+) to, or subtracted (-) from, the designated Total Code based on the Operator entered, either (+) or (-). The easiest explanation of Total Codes is through examples.


Total Code Example One

In a simple payroll where all contributions, deductions, and taxes are based on the gross earnings of the employee, all pay codes (i.e., regular pay, overtime, commission pay) would accumulate in only one total code, usually named 01 and described as Gross Earnings. In this example, 01 would be entered in the Total To field (lower section of the screen) and “+” entered in the Operator field for all pay codes defined. These entries specify that during the payroll calculation, each amount entered for each pay code would be added to total code 01 for use later in the calculation. Remember that the total code is reset for each individual employee as payroll is processed.

 

As part of the definition of each contribution, deduction, and tax code, a request to enter the total code is made in the upper portion of the screen. The amount accumulated in the total code specified here is the basis on which this contribution, deduction, or tax is calculated during Payroll Calculation. In this example, the total code for all contributions, deductions, and taxes would be 01, Gross Earnings.

 

Total Code Example Two

This is an example of a more complex payroll where a non-taxable 401(k) Plan must be processed and the total codes are again used.


In the Total Code maintenance task, two total codes must be defined: 01, Gross Earnings and 02, Taxable Earnings.


In the Pay Code maintenance task, all pay codes are defined with two entries under the Total To and Operator fields.


       Total To        Operator

       01, Gross Earnings        +

               02, Taxable Earning                        +These entries direct all earnings to be accumulated in both the 01 and 02 total codes.


In the Deduction Code maintenance task, a code must be defined for the 401(k) deduction named 4K. Since the basis for the 401(k) calculation is the employee’s gross earnings, the total code entry in the upper section is 01, Gross Earnings. The lower portion of the screen is specified as 02, Taxable Earnings, with an Operator entry of -. This will direct the subtraction of the resulting 401(k) amount from the 02, Taxable Earnings total.


In the Tax Code maintenance task, the total code for Federal taxes (upper section) must be specified as 02, Taxable Earnings, from which the 401(k) deduction has been subtracted, so that Federal taxes are calculated on the taxable earnings rather than the gross earnings. The total code for FICA taxes (upper section) is specified as 01, Gross Earnings, so that FICA taxes are calculated on the employee’s gross earnings. You should not enter Total Codes with reference to the 401(k) in the "Total to" (lower section).



FEDERAL INFORMATION PROCESSING STANDARD (FIPS 5-2) POSTAL ABBREVIATIONS AND NUMERIC CODES



Abbreviation

Numeric

Code*


Abbreviation

Numeric

Code*

Alabama

AL

01

Montana

MT

30

Alaska

AK

02

Nebraska

NE

31

Arizona

AZ

04

Nevada

NV

32

Arkansas

AR

05

New Hampshire

NH

33

California

CA

06

New Jersey

NJ

34

Colorado

CO

08

New Mexico

NM

35

Connecticut

CT

09

New York

NY

36

Delaware

DE

10

North Carolina

NC

37

District of Columbia

DC

11

North  Dakota

ND

38

Florida

FL

12

Ohio

OH

39

Georgia

GA

13

Oklahoma

OK

40

Hawaii

HI

15

Oregon

OR

41

Idaho

ID

16

Pennsylvania

PA

42

Illinois

IL

17

Rhode Island

RI

44

Indiana

IN

18

South Carolina

SC

45

Iowa

IA

19

South Dakota

SD

46

Kansas

KS

20

Tennessee

TN

47

Kentucky

KY

21

Texas

TX

48

Louisiana

LA

22

Utah

UT

49

Maine

ME

23

Vermont

VT

50

Maryland

MD

24

Virginia

VA

51

Massachusetts

MA

25

Washington

WA

53

Michigan

MI

26

West Virginia

WV

54

Minnesota

MN

27

Wisconsin

WI

55

Mississippi

MS

28

Wyoming

WY

56

Missouri

MO

29





* Use on code S or Code 1S/2S Supplemental Records only.


TERRITORIES AND POSSESSIONS


       American Samoa                AS

       Guam                                    GU

       Puerto Rico                          PR

       Virgin Islands                        VI

       Northern Marian Islands      MP




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