QuickBooks Payroll Tip – Tracking Union border Benefits

QuickBooks Payroll Tip – Tracking Union border Benefits

Setting up and tracking Union border Benefits in QuickBooks can be a fairly straightforward task, after all Union Fringes are just a stated hourly dollar amount that the company pays to the Union on behalf of the employee.

Union fringes often consist of contributions to Vacation/Holiday, Health & Welfare, Pension, Training, and sometimes Travel & Subsistence, Savings, or Fund Administration.  Depending upon the Union that you are dealing with, some of the border benefits could be unprotected to payroll taxes, while others are not.

Most of the time fringes are calculated and paid based on the number of hours the employee works on the jobsite, sometimes, however, they are a based on a percentage of gross pay.

in spite of of how they are paid (based on an hourly amount or a percentage of gross) or if they are taxable or not; in QuickBooks, each of these specific types of hourly border benefits should be set up in the Payroll Item List as Company Contribution items.

Now that you know some basic information about Union border Benefits and how you would track them in QuickBooks, let’s take it a step further and analyze some of the more complicate issues.

Not every employee will have the same border assistance package or the same border assistance rates.  This is where it becomes more complicate.  So before you begin setting things up in QuickBooks; take the time to plan things out and ask yourself these questions:

  • Do my employees ALWAYS perform work under the same Work Classification/pay rate/border rate combination?
  • Is the Work Classification/pay rate/border rate combination the same for all the jobs that employees work on?
  • Is the Work Classification/pay rate/border rate combination the same for each of our employees?

Below are basic setup instructions if ALL of your employees fall under a single Work Classification/pay rate/border rate combination, nothing changes from job to job.  In QuickBooks:

  • You create company contribution items for each specific border assistance.
  • Check the “Track expenses by job” option in the item setup.
  • Create or choose the Union from the Vendor List.
  • Assign appropriate Payroll limitations account, personally I like to create a Sub-Item of Payroll limitations called Union Fringes, and then create Sub-Items under that for each border item – it just makes it easy to see what your liability for each border item is at any given time.
  • Assign the appropriate Expense or Cost of Goods Sold Account to record the company payments; personally I like to create a Sub-Account of Cost of Goods Sold called Union Fringes.
  • Choose the applicable Tax Tracking kind, based on the information you’ve received from the Union Hall.
  • If a specific border assistance is unprotected to payroll taxes, check which taxes are to be calculated on the Taxes window
  • Select how the calculations are to be be performed.  If the border rate is paid on all straight time and overtime hours worked, choose “Calculate this item based on hours”.
  • go into the hourly rate for the assistance item and make sure that the Annual Limit option is NOT checked (by default QuickBooks always has this option chosen.
  • Edit employee records and add the border assistance company contribution items to the Payroll & Compensation Information tab in the Additions, Deductions and Company Contributions section.
  • When you create paychecks, QuickBooks automatically calculates the amounts for each employee.

Use the instructions above as a guideline for your QuickBooks setup.

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