129550699-80541-AX2012-Payroll

Table of Contents

1

Introduction

Microsoft Dynamics Courseware Overview………………………………………………..………….….….....0-2

Student Objectives………………………………………………………………………………………..………….….….0-3

Module 1: INTRODUCTION

Lesson 1: Introduction to Payroll in Microsoft Dynamics

AX 2012 R2 ........................................................................................................................................................ 1-2

Lesson 2: How Payroll Works With Human Resource Management (HRM) ........................... 1-4

Lesson 3: How Payroll Works With Other Modules .......................................................................... 1-6

Module 2: PAYROLL SETUP

Lesson 1: Setting Up the Module Parameters .................................................................................... 2-2

Lesson 2: Pay Cycles and Pay Periods .................................................................................................... 2-5

Lab A: Create a Monthly Pay Cycle .......................................................................................................... 2-8

Lesson 3: Calculation Frequencies ........................................................................................................... 2-9

Lesson 4: Earning Codes ........................................................................................................................... 2-11

Lab B: Maintain Earning Codes .............................................................................................................. 2-17

Lesson 5: Tax Setup .................................................................................................................................... 2-19

Lesson 6: General Ledger Setup ............................................................................................................ 2-22

Lesson 7: Accounts Payable Setup ....................................................................................................... 2-23

Payroll in Microsoft Dynamics® AX 2012 R2

2

Module 3: BENEFITS SETUP

Lesson 1: Benefit Elements ......................................................................................................................... 3-2

Lab A: Set Up the Components of a Benefit ..................................................................................... 3-16

Lesson 2: Contribution Calculation Rates .......................................................................................... 3-19

Lesson 3: Create Benefits ......................................................................................................................... 3-21

Lab B: Working With Benefits ................................................................................................................. 3-31

Lesson 4: Benefit Accrual Plans .............................................................................................................. 3-35

Lab C: Set Up a Sick Leave Benefit Accrual Plan for Part-Time Workers ............................... 3-40

Lesson 5: Disposable Income Definitions .......................................................................................... 3-41

Module 4: SCHEDULING

Lesson 1: Working Time Templates ........................................................................................................ 4-2

Lesson 2: Working Time Calendars ......................................................................................................... 4-5

Lesson 3: Planning the Template For a Schedule .............................................................................. 4-9

Lab: Create a Calendar ............................................................................................................................... 4-10

Module 5: POSITION SETUP

Lesson 1: Payroll Setup For a Position ................................................................................................... 5-2

Lab: Set Up Payroll Information For a Position ................................................................................... 5-8

Module 6: WORKER SETUP

Lesson 1: Earning Codes .............................................................................................................................. 6-2

Lesson 2: Taxes ................................................................................................................................................ 6-3

Lesson 3: Benefits ........................................................................................................................................... 6-7

Lesson 4: Garnishments and Tax Levies ............................................................................................. 6-12

Lab A: Maintain Worker Benefit Details .............................................................................................. 6-17

Table of Contents

3

Lesson 5: Benefit Accruals ........................................................................................................................ 6-18

Lab B: Adjust the Worker's Paid Time Off Balance ......................................................................... 6-25

Lesson 6: Bank Accounts .......................................................................................................................... 6-26

Lesson 7: Position Assignment Changes ............................................................................................ 6-28

Module 7: PAYROLL PROCESSING

Lesson 1: Generate Worker Earnings ...................................................................................................... 7-4

Lab A: Create Worker Earnings .............................................................................................................. 7-19

Lesson 2: Work With Earnings Statements ....................................................................................... 7-23

Lab B: Maintain the Earnings Statements .......................................................................................... 7-29

Lesson 3: Generate Pay Statements ..................................................................................................... 7-33

Lab C: Generate Pay Statements ........................................................................................................... 7-35

Lesson 4: Work With Pay Statements .................................................................................................. 7-37

Lab D: Working With Pay Statements ................................................................................................. 7-52

Lesson 5: Issue Worker Payments ......................................................................................................... 7-54

Lab E: Issue Worker Payments ................................................................................................................ 7-58

Lesson 6: Post Payroll and Generate Vendor Invoices for Benefits and Taxes ................... 7-62

Lab F: Post Payroll and Generate Vendor Invoices......................................................................... 7-65

Lesson 7: Work With Issued Pay Statements ................................................................................... 7-66

Lab G: Reissue a Payment for a Lost Check ...................................................................................... 7-69

Lab H: Process a Gross Up Payment .................................................................................................... 7-71


4

Module 8: REPORTS AND INQUIRIES

Lesson 1: Inquiries .......................................................................................................................................... 8-2

Lesson 2: Reports ........................................................................................................................................... 8-5

0 - 1

INTRODUCTION

Training is an important component of maintaining the value of a Microsoft

Dynamics® investment. Quality training from industry experts keeps you up-to-

date and helps you develop the skills necessary for fully maximizing the value of

your solution. Microsoft Dynamics provides different kinds of training to meet

everyone’s needs, from online training, classroom training, or training materials.

Select the training type that will best help you stay ahead of the competition.

Online Training

Online training delivers convenient, detailed training in the comfort of your own

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Online training options combine the efficiency of online training with the

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Classroom Training

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receive practical experience with instruction from our certified staff of experts.

Training Materials

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information-packed training manuals. The many training manuals features many

tips, tricks, and insights that you can reference continuously.

Microsoft Dynamics Courseware

The Microsoft Dynamics courseware consists of detailed training manuals that are

designed from a training perspective. These manuals include advanced topics, in

addition to training objectives, exercises, interactions, and quizzes.

Look for a complete list of manuals that are available for purchase on

CustomerSource or PartnerSource.


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Microsoft Dynamics Courseware Contents

Microsoft Dynamics courseware contains labs and quick interactions. These help

Lab

Within the Microsoft Dynamics training materials, you will find labs. These labs

are typically offered in two levels to accommodate each student’s variety of

knowledge and expertise. We suggest that you try the High level steps first. If you

need help completing the task, look to the information in the Detailed steps.

High level steps

High levels steps are the most challenging. These steps are designed for the

experienced student who requires little instruction to complete the required task.

Detailed steps

Detailed steps are geared toward new users who require detailed instructions and

explanations to complete the lab. Detailed steps guide you through the whole

task. This includes navigation.

Introduction

0 - 3

Student Objectives

What do you hope to learn by participating in this course?

List three main objectives here.

1.

2.

3.


0 - 4

1 - 1

MODULE 1: INTRODUCTION

Module Overview

This module introduces the Payroll features in Microsoft Dynamics® AX 2012 R2

that organizations will use to track worker earnings and issue payments.

Objectives

The objectives are:

Describe the overall Payroll process.

Describe how the Payroll and Human resources modules work

together.

Describe how the Payroll module integrates with other modules in

Microsoft Dynamics® AX 2012.


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Introduction to Payroll in Microsoft Dynamics

AX 2012 R2

Setting Up to Process Payroll

Before you can start to pay workers, the organization must set up the Payroll

module to support the maintenance and information process that is required to

begin issuing payments. These setup tasks are discussed in this course. They

include the following:

1. Set up how the Payroll module will function

o Define pay cycles—the frequency (weekly, semimonthly, and so

on) at which payroll runs are processed.

o Define the dates for pay periods in all pay cycles.

o Set up earning codes—the basic unit that the payroll process

uses to calculate rates and amounts for worker earnings of

almost any type.

o Define the regions where workers reside and work for tax

calculations.

o Define the accounts and vendors that the payroll process will use

when you post accounting entries to the general ledger or when

you issue the payment.

2. Define benefits, deductions, and accruals

o Set up categories of benefits.

o Define the specific benefit plans and options that are offered to

workers.

o Set up the benefits so workers can enroll in the benefit.

o Define plans for benefit accruals, such as vacation and sick leave.

3. Create working schedules

o Define the times of day that employees work.

o Define the calendar-based schedule that determines the days

that employees work.

4. Set up positions for payroll

o Establish the frequency in which the position is paid.

o Define the organization or legal entity that is responsible for the

position.

Module 1: Introduction

1 - 3

o Assign an earning code to the position so that regular salary or

hourly wage earnings can be generated for the position.

o Assign a default schedule for the position.

5. Set up workers for payroll

o Assign the recurring earnings, such as parking or uniform

allowances, that are not considered part of the worker's base

wage.

o Assign workers to the compensation plans that determine their

salary or earning rate.*

o Define where the worker resides and works for tax calculations.

o Enroll the worker in benefits such as medical, dental, and

retirement plans.

o Enroll the worker in benefit accrual plans, such as vacation, sick

leave, and so on.

o Enter worker bank account information if the worker is paid by

direct deposit.

Note: Compensation plans are set up in the Human resources module. For

more information, refer to the Human Resource Management (HRM) in Microsoft

Dynamics AX 2012 R2 course.

Process Payroll

After the setup is complete, you can start to process the worker’s earnings, by

using the earnings statement and the pay statement. First, you must create the

earnings statement. The earnings statement contains the worker’s regular salary,

leave, and any other recurring earnings. After the earnings statement is released

for payment, the earnings are used to generate the pay statement. In addition to

the worker earnings, the pay statement includes all benefits, deductions, and

taxes that apply to the worker. The payment statement is used to issue payment

to the worker and to post the organization’s costs to the general ledger.

Payments are issued for each pay period. The pay period is determined by the

pay cycle (biweekly, weekly, monthly and so on). Although organizations can

choose to use different pay cycles for different types of workers, the

organizations must process payroll separately for each pay cycle.


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FIGURE 1.1:PROCESSING PAYROLL FOR A PAY PERIOD

How Payroll Works With Human Resource

Management (HRM)

Many settings in the Human resources module affect the Payroll module.

Worker, position, and compensation settings must be configured correctly before

you can process a worker’s pay.

To make the Payroll module setup easier, you can access many of the human

resources settings through either the Human resources area page or the Payroll

area page. Many forms are available in both modules. They include the Benefits

and Positions forms.


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Fixed Compensation

The Payroll module is used to pay workers. However, much of having to manage

worker compensation is performed in the Human resources module. You use the

compensation management forms to control the delivery of base pay and

awards. You control an employee's fixed base pay and merit increases through

fixed compensation plans. The compensation features make it easy to define

scales and tables of pay rates for all staff workers.

Positions

The worker's position assignment determines much of the payroll process. This

includes the default earning basis and the schedule for the worker. Workers that

have multiple positions can have different pay rates for each position or they can

have positions that are paid by different legal entities.

The position forms are available in both the Human resources and Payroll

modules.

Benefits

Benefits can be set up and maintained in both the Payroll and Human resources

modules. The benefits features help you maintain the benefits, deductions, and

the workers' compensation plans that the organization offers or processes for its

workers. Benefits are integrated in the payment process and all employee

deductions and employer contributions are automatically included in the

payment that you issue to the worker.

Leave Types

You can use the leave feature in Human resources to set up and enter the

different types of leave that workers can take during their employment. When

you define the different types of leave, you can associate the leave with an

earning code. Earning codes are a payroll element that forms part of the worker

earnings generation process. The earning code can determine whether the leave

is paid or not.

The earnings generation process creates leave-based earnings lines automatically

if the leave is entered before the earnings process is started and the pay rate for

those leave-based earnings is determined by the associated earning code. If the

earning code is also associated with a benefit accrual plan, such as sick or

vacation time, the leave you enter is automatically included in the worker's

earnings and it will decrease the worker's accrued balance in the plan accordingly

when it is paid out.


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How Payroll Works With Other Modules

The Payroll and Human resources modules each have integral roles in the other

module's functions and processes. However, the Payroll module also integrates

with other modules in Microsoft Dynamics AX. Payroll financial transactions must

be specified in the general ledger and worker payments must be issued through

Accounts payable, although, typically a payroll staff member will not use forms

in these modules. Each process can be performed in the Payroll module.

General Ledger

As with all financial transactions in Microsoft Dynamics AX, payroll transactions

are posted to the general ledger. Although the pay statement is the primary

payroll document that affects the general ledger, the financial dimension values

that are specified on the individual entries in the statement can originate from

many sources.

For example, you can set up a position so that earnings for the position are

posted to a ledger account that is specific to that position's department or cost

center. Earning codes can be similarly set up.

You also have the option to review the accounting distributions and the

subledger journal entries that you create before you post the pay statements to

the general ledger.

Accounts Payable

Worker payments are issued through the Accounts payable module. Generating

payments in Payroll resembles the same task that performed is in the Accounts

payable module.

To account for the worker payments, a single vendor invoice is created and

posted for the net of all worker payments in a pay period. This invoice is settled

when the payment journal that the payments are generated from is posted to the

general ledger.

Payments To Benefit Providers And Tax Authorities

Benefit and tax payables are also processed through the Accounts payable

module. As part of a single payroll run, vendor invoices are created for each

benefit provider and the tax authorities that must be paid.


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Module Review

This module introduced the Payroll features in Microsoft Dynamics® AX 2012 R2

that organizations will use to track worker earnings and issue payments. This

module also introduced the following concepts:

How the payroll process uses earnings and pay statements to issue

payments to workers.

How the Payroll and Human resources module work together.

How the Payroll module works with the General ledger and Accounts

payable modules.

Test Your Knowledge

Test your knowledge with the following questions.

1. Compensation plans are set up in which of the following modules?

( ) General ledger

( ) Human resources

( ) Payroll

( ) Production control

2. You must create a pay statement before you can create an earnings

statement.

( ) True

( ) False

3. You can process payroll for multiple pay cycles in a single process.

( ) True

( ) False


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Test Your Knowledge Solutions

Module Review and Takeaways

1. Compensation plans are set up in which of the following modules?

( ) General ledger

(√) Human resources

( ) Payroll

( ) Production control

2. You must create a pay statement before you can create an earnings

statement.

( ) True

(√) False

3. You can process payroll for multiple pay cycles in a single process.

( ) True

(√) False

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MODULE 2: PAYROLL SETUP

Module Overview

Issuing payment to a worker requires much preparation before you can print a

check. This module examines the general setup that you must perform before

you can start maintaining calendars, positions, and workers for Payroll in

Microsoft Dynamics® AX 2012.

The information that you set up in this module determines how frequently and at

what rate workers are paid. Additionally, you will identify the taxes that both the

company and the worker are liable for and how to withhold or pay for them.

This module also briefly reviews the prerequisite features that must be set up in

other modules before you can process payroll. Ledger accounts for payroll,

accounting distributions, journals, methods of payment for check and direct

deposit, and a vendor account must all be set up in the General ledger and

Accounts payable modules. Although these features are typically not configured

by a Payroll staff member, it is important to recognize that other modules in

Microsoft Dynamics AX play key roles in the end-to-end payroll process.

Objectives

The objectives are:

Review Payroll parameters and the parameters that are shared with

the Human Resource Management (HRM) module.

Create pay cycles to determine when payments are issued to

workers.

Define how frequently benefit deductions, employer contributions,

and other earnings are calculated.

Create and maintain earning codes for all types of earnings that an

employer offers to workers.

Set up tax information for a legal entity and its workers.

Review the General ledger setup that is required to process payroll.

Review the Accounts payable setup that is required to process

payroll.

Payroll in Microsoft Dynamics® AX 2012

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Setting Up the Module Parameters

Payroll Parameters

Use the Payroll parameters form to customize the module to fit your company's

processes. You can define settings that control how your payroll is calculated and

generated, specify payment and accounting methods, and set up numbering

sequences for Payroll transaction documents. Typically, you set these parameters

before you start to process the payroll. You can change the parameters at any

time.

Click Payroll > Setup > Parameters > Payroll parameters to open the form.

Click a link on the left side of the form to view each area.

Calculation Settings

The calculation settings determine how certain features in a payroll run are

processed before a pay statement is submitted for payment.

Field Description

Batch bundle size The number of pay statements or

earnings statements that can be

grouped and processed together.

Typically this field is left at zero and

there is no limit on the number of

statements that can be grouped.

Accounting date options for

earnings

The accounting date to use for

earnings. If you choose to summarize

earning statement lines when pay

statement lines are generated, the

accounting date for each earning line is

the pay period end date. If you choose

not to summarize earning statement

lines, then the original date from the

earning line is the accounting date. The

accounting date for the pay statement

earning line is used for the earnings

when the pay statement is posted.

For benefits and tax lines, the pay

period end date is always used.

Payroll clearing account The ledger account that accumulates

earnings to be distributed to other

liability accounts. You must select an

account to post pay statements.

Module 2: Payroll Setup

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Field Description

Apply annual retirement

wage limit

If this check box is selected, retirement

benefits on all retirement plans stop

calculating when the worker reaches the

annual wage limit.

Recover arrears in all

payment run types

If this check box is selected, arrears are

recovered in all payment types. If it is

cleared, arrears are recovered only on

your regular payroll runs and not in

special or additional runs.

Arrear threshold If an amount is put in arrears, or if an

amount in arrears is recovered, the pay

statement is automatically recalculated

to make sure that taxes for the pay

statement are correct. For example, in

some instances, the arrearage amount

changes the taxable wage, and the

change in taxable wage causes a

change in the tax amount. The change

in the tax amount then changes the

amount that can be taken in arrears,

and then this changes the taxable wage.

The arrear threshold prevents the

calculation of arrears from continuing

forever. Iterative arrears calculations are

stopped when the threshold amount is

reached. The default threshold amount

is 1.00 United States dollar (USD). The

smallest amount that you can have is

0.01 USD.

Payment Issuance

Payment issuance determines how worker payments are processed through the

Accounts payable module. The features that you select in this area of the

Payroll parameters form are set up before you set up Payroll for the first time.

The Accounts payable setup that supports Payroll is discussed in the "Accounts

Payable Setup" lesson later in this module. The following table describes how

each field affects processing.

Field Description

Check method of payment The method of payment that is used

when pay statements are disbursed to

workers as checks.


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Field Description

Electronic method of

payment

The method of payment that is used

when pay statements are disbursed to

workers as electronic payments.

Vendor account for worker

payments

Payments to workers are generated in

the Accounts payable module. The

payables process requires a vendor

account. Therefore, you must create a

vendor account to use for worker

payments and select the vendor in this

field.

Payment journal name The payment journal to use when you

submit pay statements for payment.

Only journals with the Payroll

disbursement journal type are

available.

Print employer contributions Select the check box to print employer

contributions for taxes and benefits on

the pay statements that you issue.

Procurement category The category to use for the vendor

invoice lines that are used to pay

workers.

Number Sequences

Enter a code in the Number sequence code fields to identify the document

number for Payroll documents such as the earnings statement, pay statement,

and the vendor invoices that worker payments are issued through. You must also

define the sequence code for payroll batches—an identifier for groups of

earnings that are generated at the same time. Unique identification numbers are

generated with the code as a prefix for the documents that are listed in the

Reference field.

Human Resources Shared Parameters

Use the Human resources shared parameters form to define settings that are

used for all legal entities. Click the link on the left-side of the form to view each

area. Click Payroll > Setup > Parameters > Human resources shared

parameters to open the form.

The description of the areas located on this form include the following:

Identification: You can select the identification types that represent

the identification numbers that are assigned to workers. This includes

worker Social Security Numbers (SSN) and other federal forms of


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identification.

Number sequences: You can set up the codes for numbering

sequences for Human Resources documents. If you do not use the

Human resources module, you must set up at least the Personnel

number and Position number sequences.

Payroll: Displays the most recent Payroll tax version information

that is installed for Microsoft Dynamics AX. Click the Update tax

data link to load the currently installed tax data so that it is used for

tax calculations.

Positions: Contains the Available for assignment field. By default,

this field determines whether workers can be immediately assigned

to newly created positions. If you select the Never option, you must

manually set the date that a new position is available for assignment.

If the Always option is selected, the position is available on the date

the position is created.

Pay Cycles and Pay Periods

Pay cycles determine how frequently a payroll is run and the days that workers

are paid. For each pay cycle that you create, you must generate the pay periods

that make up the cycle and then specify the payment date for each period.

You can create pay cycles with the following frequencies:

Daily

Weekly

Biweekly

Semimonthly

Monthly

Quarterly

Semiannually

Annually

Pay cycles are assigned to positions to determine when workers in those

positions are paid. Your company can use different pay cycles for different

groups of positions. Because there are many options, you can set up pay cycles

almost any way that you want. For example, you can select to pay all salary

workers two times a month on the last day of each pay period, and pay hourly

workers weekly on the Wednesday following the end of the pay period. Another

option is that all workers are assigned to bimonthly pay cycles. However, workers

in one department are paid on the last day of the pay period whereas another

department is paid on the following Monday.

Pay cycles are also assigned to payroll calculation frequencies to determine when

benefits and recurring earnings are processed.


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Pay Cycles and Pay Periods Form

Use the Pay cycles and pay periods form to create pay cycles and to generate

pay periods for the cycles. You can also maintain existing pay cycles and default

payment dates.

Click Payroll > Setup > Pay cycles and pay periods to open the form.

Working With Pay Periods

The grid area displays the pay periods that are generated for the pay cycle. The

Default payment date column displays the date when worker payments are

scheduled for a pay period.

Click Generate to open the Enter pay period details dialog box and to generate

pay periods for the pay cycle. The dialog box differs, depending on whether you

are creating a new pay cycle or updating an existing pay cycle. Additional

information for generating and, or updating pay cycles includes the following:

When you generate pay periods for new pay cycles, you specify the

number of periods to generate, the first date of the first pay period,

and the first default payment date. The pay period process uses this

information to generate the pay periods.

If you update an existing pay cycle, you can add more pay periods to

the cycle and set the default payment date for the periods that you

add. The start date for the first additional pay period is the first

calendar day after the last existing pay period. Pay periods are not

automatically generated for future years. Therefore, you must

periodically maintain the pay cycles.

You can also use the grid area on the Pay cycles and pay periods form to

change the payment dates for each pay period and to review open and closed

pay periods. Use the Status filter field to view open pay periods, all pay periods,

or closed pay periods. When you open the form, only open pay periods are

shown. Pay statements cannot be generated or submitted for payment when the

statement is for a closed pay period.

Changing Payment Dates

The Default payment date column displays the date when worker payments are

scheduled to be issued. After you generate pay periods for the pay cycle, you can

change these payment dates so that payments are not scheduled on holidays,

weekends, or any day when issuing payments is not possible. You can also

change the payment date on the pay statement before you submit it for

payment.


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Demonstration: Creating a Pay Cycle

This demonstration shows how to create a pay cycle record and how to generate

pay periods and payment dates for the cycle.

Demonstration Steps

1. Create the pay cycle record.

a. Click Payroll > Setup > Pay cycles and pay periods.

b. Click New.

c. In the Pay cycle field, enter a name for the pay cycle. For

example, enter "Weekly" for a cycle that includes week-long pay

periods.

d. In the Description field, enter a description for the pay cycle.

e. In the Pay cycle frequency field, select how frequently a payroll

is run for the cycle.

2. Generate pay periods and define payment dates for the cycle.

a. Click Generate.

b. In the Number of periods field, enter the number of pay periods

to create for the cycle. For example, if you are creating a

quarterly pay cycle and select to generate 24 pay periods, the

process will generate six years of pay periods.

c. In the pay period grid area, select a pay period that must have its

payment date changed.

d. Enter a new date in the Default payment date column.


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Lab A: Create a Monthly Pay Cycle

Scenario

Mia, the Payroll Administrator at Contoso Entertainment System USA, must create

a new monthly pay cycle for one of Contoso's new office locations. The new

office opens January 1, 2013. She must generate pay periods for the whole year.

The payment dates for this pay cycle are on the first day of the following month.

Mia realizes that some pay dates will occur on weekends. Mia must change each

weekend payment date to the previous Friday. The 6/1/2013 and 9/1/2013

default payment dates occur on a weekend.

Lab Setup

When you first open Microsoft Dynamics AX, an error message may display

stating that the server is unavailable. This occurs when the Microsoft Dynamics

AX service could not be started by the virtual machine. To start the service, follow

these steps.

1. Click Start > All programs > Accessories > Command Prompt.

2. Enter "net start AOS60$01" and press Enter. It can take more than a

minute for the service to start.

3. After the service starts, close the Command Prompt.

High Level Steps

1. Create a new monthly pay cycle.

2. Generate pay periods for the year.

3. Change the default payment dates that occur on a weekend to the

previous Friday.

Detailed Steps

1. Create a new monthly pay cycle.

a. Click Payroll > Setup > Pay cycles and pay periods.

b. Click New.

c. In the Pay cycle field, enter "Monthly".

d. In the Description field, enter "Monthly - First day of following

month."

e. In the Pay cycle frequency field, select Monthly from the list.

2. Generate pay periods for the year.

a. Click Generate.

b. In the Number of periods field, enter "12".


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c. In the First period start date field, enter "1/1/2013".

d. In the First payment date field, enter "2/1/2013".

e. Click Create.

3. Change the default payment dates that occur on a weekend to the

previous Friday.

a. In the grid area, find the row with the 6/1/2013 default payment

date.

b. Click in the Default payment date column for the 6/1/2013

date.

c. Click the Calendar button and select 5/31/2013.

d. In the grid area, find the row with the 9/1/2013 default payment

date.

e. Click in the Default payment date column for the 9/1/2013

date.

f. Click the Calendar button and select 8/30/2013.

g. Click Close.

Calculation Frequencies

Payroll calculation frequencies differ from pay cycles because they determine

when benefit contributions, deductions, and other recurring earnings for a worker

are processed. Frequently these payroll elements are not processed every pay

period like a worker payment. Calculation frequencies schedule when these

amounts are calculated.

For example, you can pay a car allowance on the first pay period of every month,

or process a term life insurance benefit on the last pay period of every quarter.

Other common calculation frequencies include the first pay period of the year,

yearly on a specific date, and alternating pay periods.

You create the calculation frequency and assign the pay periods to it. After you

have created the frequency you assign the frequency to benefits and earning

codes for workers' position assignments.

If you do not assign calculation frequencies to earning codes, deductions, and

contributions, they are processed in every pay period for a pay cycle.

Payroll Calculation Frequencies Form

Use the Payroll calculation frequencies form to set up custom frequencies for

benefits, deductions, and some earnings types. The frequencies determine the

pay periods that the calculations occur in. Click Payroll > Setup > Payroll

calculation frequencies to open the form.

If you do not set up payroll calculation frequencies, all earnings, contributions,


2 - 10

and deductions are processed every pay period. You can create custom

frequencies to fit your company's preferred process.

Selecting Pay Periods for the Calculation Frequency

You must identify the pay periods in a pay cycle that the calculation occurs in.

Typically, you identify the pay periods in each pay cycle that your organization

uses. For example, you might have positions with a weekly pay cycle and

positions with a semimonthly pay cycle. If your organization offers a car

allowance that should always be processed in the first pay period of the month,

you must define that pay period for each pay cycle that is assigned to workers in

the organization.

Use the Pay cycle field to work with and view the different pay periods that make

up the frequency. The pay periods in the grid area display the pay periods when

the calculation is scheduled to occur for the selected pay cycle. To add pay

periods from the selected pay cycle to a calculation frequency, click Add. A dialog

box appears so that you can select multiple pay periods at the same time. To

remove a pay period, select the pay period in the grid area, and then click

Remove.

The Status filter field determines whether only open, closed, or all pay periods

are displayed.

Demonstration: Create Payroll Calculation Frequencies

This demonstration shows how to create a new payroll calculation frequency and

how to specify the pay periods that the calculations occur in.

Demonstration Steps

1. Create a new calculation frequency record.

a. Click Payroll > Setup > Payroll calculation frequencies.

b. Click New.

c. Enter a name for the frequency in the Frequency field.

d. Enter a short description for the frequency in the Description

field.

e. In the Pay cycle field, select the pay cycle to associate the

frequency with.


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2. Add pay periods to the calculation frequency.

a. Click Add.

b. On the Select pay period dialog box, select the pay periods

from the selected pay cycle to add to the calculation frequency.

For example, if you are creating a calculation frequency for the

first pay period of each month, select the check box to the left of

the first pay period that ends in each month.

c. After you have selected all the pay periods for the calculation

frequency, click Add to insert the pay periods into the calculation

frequency.

d. Repeat steps 2a through 2c to add pay periods to other pay

cycles that your company uses. For example, if your company

uses both weekly and semimonthly pay cycles, and you are

creating a calculation frequency for the first pay period of each

month, you must select the first pay period for each month in

each pay cycle.

e. Click Close to close the form.

Earning Codes

Earnings are the base employer expense that is paid to the worker. Earning codes

define the rules and calculation methods for a worker’s earnings, and they also

determine the taxation and reporting rules that apply to worker earnings.

You must create a unique earning code for each type of earning that your

company offers. In addition to base salary and hourly earning codes, you will

create earning codes for overtime, vacation, sick leave, bonuses, and worker

allowances. You can also create gross up earning codes to gross up taxes and to

make sure that workers are paid a specific, additional amount, frequently for

bonuses or reimbursements.

Together with fixed compensation plans and schedules, earning codes are one

element of the process that calculates a worker's wages when you generate

earnings.

Earning Codes Form

Use the Earning codes form to define the elements that determine a worker's

pay and taxation. Earning codes also control how the earnings are recognized as

expenses in your company's general ledger.

Click Payroll > Setup > Earning codes to open the form.

After they are set up, earning codes are assigned to workers. When you process a

payroll, the earning codes are used to calculate a worker's earnings for that pay

period.


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Field Description

Include in payment run type Select the payment run that will include

this earning code.

Select Primary to indicate that the code

is used in regular payroll processing.

Additional payment run types are for

special payrolls, such as bonuses and

awards. Gross up and Automatic

payment run types work together to

process a specific earning amount and

an additional gross up amount.

Base earnings component Select this check box if the earning code

should be considered when calculating

the base wage for a worker.

Rate basis Select the rate at which the earnings are

calculated. For example, select Hourly

for hourly earnings. If you are creating an

earning with an amount that is paid over

a period of time, select Pay period,

Monthly, or Annual. Select Flat amount

for one-time earnings.

Unit of measure Select Hours for all earnings which pay

out based on time or salary. Select Each

for all earnings which pay out based on

dollars only such as a bonus, fringe

benefit, etc. Select Pieces for earnings

which payout based on the number of

pieces processed.

Productive Select this check box if the earning code

represents the worker's worked hours.

Tax method Select the type of earnings generated by

this earning code to determine the tax

calculation rates.

Supplemental wages are typically

compensation that is paid to a worker in

addition to his or her regular wage.

Fringe benefit type Select Standard or Group term life

from the list for the benefits that a

worker is taxed on even though he or

she does not receive an additional

amount in his or her pay.


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Field Description

Amount of multiplier For calculated earnings, enter a

multiplier to apply to the earnings. For

flat amounts (Rate basis=Flat amount),

enter the earning amount.

Gross up earning code Select the earning code to process as the

additional gross up earning.

This field is available only for the earning

codes where the Include in payment

run type field is set to Gross up.

Base definition Select the base earnings to use when

you calculate the benefit amounts that

are based on a worker's regular pay. For

example, if overtime pay is 1.5 times the

regular hourly wage, select Time and a

half to calculate the benefit amounts at

the time and a half rate.

Best Practice: Select the Primary and additional option in the Payment

run type field when you create the earning codes that are usually used only in

primary payment runs. If you select Primary and additional, you can use the

earning code multiple times in one pay period.

Accounting for Earnings

Use the Accounting FastTab on the Earning codes form, to define how to record

the expense in the general ledger. If the expenses related to the earning code are

related to a project, you can specify a project category for the code that identifies

how the earning amount should be reported in the project.

Use the Posting rules grid area to specify the main account that the earnings

post to. Use the Legal entity field to select the company that you want to set

accounting criteria for. The selected legal entity determines the chart of accounts

that is available in the Posting rules fields. By doing this, you can set different

main accounts for the different legal entities that will use the earning code.

Click Add to insert a new grid row. If the earnings for different departments, jobs,

or workers must post to different main accounts, enter the account in the Main

account column and select the department, job, or worker that the rule applies

to. Leave the Department, Job, and Worker fields blank to post all earnings that

are generated from an earning code to the same main account.


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Reporting W-2 Information for Earnings

Use the Reporting FastTab to associate earning codes with box numbers on W-2

forms. The W-2 form is used to report wages and any withheld taxes for workers

to the United States Internal Revenue Service (IRS). There is only one option

available for the reporting country—the United States.

After you have processed payroll, you can use the Form W-2 report to print W-2

forms and the Form W-2 electronic report to generate an electronic file for

submission to the IRS.

Maintaining Earning Code Versions

Occasionally, you must update the earning codes to increase the amounts of

bonuses or wages and to change reporting information. Although the changes

that you can make to an earning code are limited to the rate basis, amount or

multiplier, and reporting codes, you can use the Maintain versions form to

define when these changes take effect and when old versions expire. Certain

elements of an earning code, such as the payment run that the code is used in,

and the taxing method cannot be set to change sometime in the future.

The Maintain versions button, form, and record filter are used throughout

Microsoft Dynamics AX. After you are familiar with setting effective dates for new

versions of a record, you can maintain several versions for many types of records

in the Payroll module and throughout Microsoft Dynamics AX.

The Maintain versions button and record filter are available on many forms

throughout Microsoft Dynamics AX.

Creating New Earning Code Versions

On the Earning codes form, select the earning code to update and then click

Maintain versions to open the Maintain earning code versions form. Use the

Rates tab to update the earning rate or the flat amount and the Reporting tab to

update W-2 reporting information for the earnings. When you update the rate or

reporting information, you set the date that the change will take effect. You can

choose to start using the new earning code version immediately or select a date

in the future. When you finish entering the new rate or reporting information, the

earlier version is set to expire before the new version takes effect.

Reviewing Older Versions

Click the Current record filter on the Earning codes form to display the state of


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all records at a date that you specify. Enter the date, and then click Apply. The

form displays all earning codes for that date.

Demonstration: Enter a Regular Hourly Earning Code

This demonstration shows how to create an earning code that will be used as the

base earning code for hourly workers.

Demonstration Steps

1. Create the earning code record.

a. Click Payroll > Setup > Earning codes.

b. Click New.

c. In the Earning code field, enter a name for the code. For

example, enter "base".

d. In the Description field, enter a description of the code. For

example enter "Regular base earnings".

2. Define how earnings and taxes are calculated.

a. In the Include in payment run type field, select Primary and

additional.

b. In the Tax method field, select Regular to tax the earnings at

the standard rate.

c. Select the Base earnings component check box to include the

earning code in the worker base pay calculation.

d. In the Rate basis field, select Hourly as the rate to use to

calculate earnings.

e. In the Unit of measure field, select Hours.

f. In the Amount or multiplier field, enter "1".

g. In the Base definition field, select Base time.

3. Enter accounting and reporting information.

a. In the Legal entity field, select the company to define

accounting information for.

b. Click Add to insert a new row in the table.

c. In the Main account column, select the default main account to

post earnings to. For example, regular earnings will typically post

to the Salaries – Wages Expense account.


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d. Repeat steps 3a through 3c for each legal entity that will use the

earning code.

e. Specify where on the W-2 report to report earnings from this

code in the Reporting FastTab.

Demonstration: Create a Gross Up Earning Code

This demonstration shows how to create a bonus earning code and how to create

a gross up earning code to gross up the taxes for the bonus earnings.

When you create the earning codes to pay a worker a specific amount after taxes,

two earning codes are required. You create a main earning code for the earnings,

for example, a bonus or relocation reimbursement. You also create a secondary

earning code to pay the taxes that originate from the main earning code,

frequently known as a gross up. The main code references the secondary code.

Therefore, the secondary code must be created first.

Demonstration Steps

1. Create the secondary gross up earning code.


b. Click New.

c. In the Earning code field, enter "Bonus gross up".

d. In the Description field, enter a description of the code.

e. In the Include in payment run type field, select Automatic.

f. Click OK to update the tax method, base earnings, and quantity

unit.

g. In the Accounting FastTab, click Add to insert a new grid row.

h. In the Main account column, select a main account to post the

earnings to.

2. Create the main earning code.

a. On the Earning codes form, click New.

b. In the Earning code field, enter "Performance bonus".

c. In the Description field, enter a description of the code.

d. In the Include in payment run type field, select Gross up.

e. Click OK to update the tax method, base earnings, and quantity

unit.

f. In the Gross up earning code field, select the Bonus gross up

earning code that you set up earlier.

g. In the Accounting FastTab, click Add to insert a new grid row.

h. In the Main account column, select a main account to post the

earnings to.

i. Click Close.


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Lab B: Maintain Earning Codes

Scenario

Mia, the payroll administrator at Contoso Entertainment System USA, is notified

that the company car allowance will be increased by five percent starting in 2014.

Additionally, in 2014 a new late shift earning code will be used for warehouse

workers. Mia must update the car allowance earning code for 2014 by creating a

new version of the earning code. She must also create a new earning code for the

late shift workers who will earn slightly more for each hour than the day shift

workers assigned to the same position.

Exercise 1: Increase the Car Allowance Amount in 2014

Exercise Scenario

Mia must create a new version of the car allowance earning code that will take

effect on January 1, 2014. The new version will increase the amount by five

percent. The currency that is used is the United States dollar (USD) and the

current rate is 100.00 USD. The new rate is 105.00 USD.

High Level Steps

1. Open the earning codes for car allowances.

2. Create a new version of the earning code.

Detailed Steps

1. Open the earning codes for car allowances.


b. Select the Car allowance earning code from the list on the left

side of the form.

2. Create a new version of the earning code.

a. Click Maintain versions.

b. On the Rates tab, click Add.

c. In the Effective field, enter "1/1/2014".

d. In the Amount or multiplier field, enter "105.00".

e. Click Close.

f. Click Yes.


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Exercise 2: Create a Late Shift Earning Code

Exercise Scenario

Mia must create an earning code for workers that are assigned to the late shift so

that they earn an additional amount for each hour that is greater than the

standard rate for their position assignment.

The earning code should be processed in Primary and Additional

payment runs.

Earnings from the code are subject to Regular tax rates.

Workers that are assigned this code earn an additional 1.10 USD for

each hour that they work.

All expenses for late shift earnings must post to main account

602100.

High Level Steps

1. Create a new "Late shift" earning code record.

2. Enter the rate and tax information.

3. Specify the main accounts to post expenses to.

Detailed Steps

1. Create a new "Late shift" earning code record.


b. Click New.

c. In the Earning code field, enter "Late shift".

d. In the Description field, enter "Late shift".

2. Enter the rate and tax information.

a. In the Include in the payment run type field, select Primary

and Additional.

b. In the Rate basis field, select Flat amount.

c. In the Unit of measure field, select Hours.

d. In the Tax method field, select Regular.

e. In the Amount of multiplier field, enter "1.10".

3. Specify the main accounts to post expenses to.

a. In the Accounting FastTab, in the Legal entity field, select

USMF.

b. In the Posting rules grid area, click Add.

c. In the Main account column, select 602100.

d. Click Close.


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Tax Setup

In Microsoft Dynamics AX, in the Payroll taxes area, you must first identify the

states where you have operating units and the rates for unemployment taxes.

Later you must set up tax-related information for workers to calculate the taxes

for which each worker is responsible. This module discusses the tax setup that is

used throughout the organization. For more information about how to define

worker-specific tax criteria, refer to the "Worker Setup" module later in this

course.

Identify Employer Tax Regions

An important factor in determining whether a legal entity must pay taxes in a

state is whether the legal entity has a significant business presence, in the state.

In Microsoft Dynamics AX, each state or territory that has a legal entity with a

significant business presence is defined as an employer tax region. You identify

the states and territories where your company has a business presence by using

the Employer tax regions form.

Click Payroll > Setup > Taxes > Employer tax regions to open the form.

Every legal entity must have at least one employer tax region. Legal entities that

have a significant business presence in more than one state have multiple

employer tax regions. These employer tax regions are used with multiple-state

taxation and reciprocity rules to determine when and where you should withhold

and pay taxes.

On the Employer tax regions form, select the Active check box for each state or

territory where your company has a significant business presence.

Define Worker Tax Regions

Tax regions identify the cities where your workers can work and where they claim

residency for payroll tax deductions. You must set up these regions before you

start to process payments for workers. Tax regions determine the set of taxes that

are considered when earnings are generated for workers.

Use the Tax regions form to define worker tax regions. Click Payroll > Setup >

Taxes > Tax regions to open the form.

Before you start, it is helpful to determine the county, state, and ZIP Code/Postal

Code for each city that you will identify as a tax region. When you enter a tax

region, if this region is considered as more than one tax region, you will receive a

message that asks you to define and select the specific tax region.


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Demonstration: Set Up a Tax Region

This demonstration shows how to create a new tax region for workers.

It is helpful to determine the county, state, and ZIP Code/Postal Code for each

city that you identify as a tax region before you enter the tax region record.

Demonstration Steps

1. Enter a new tax region.

a. Click Payroll > Setup > Taxes > Tax regions.

b. Click New.

c. In the Name or description field, enter a name to identify the

tax region. For example, enter "UT – Salt Lake".

d. In the ZIP/postal code field, enter the ZIP Code/Postal Code for

the tax region. For example, enter "84101".

e. Click OK to save the tax region.

Set Up Tax Codes

You do not have to create tax codes. Microsoft Dynamics AX provides the codes

for all payroll taxes. However, you must specify how your organization uses each

tax code. You do this by entering information such as your organization's account

ID with the taxing authority, taxing rate, and the wage base if it is necessary.

Additionally, you must enter the reporting requirements for each tax code for W-

2 forms. You must also define how to post the tax withholdings to the general

ledger and the vendor account for the agency that the tax is paid to. You must

enter this information for each legal entity to which a tax code applies.

The tax codes are automatically assigned to workers based on the tax regions

they work in, their position, and the legal entity that is responsible for their

payment.

Maintaining Tax Code Versions

You can maintain versions of the information that you enter for each tax code by

clicking Maintain versions and entering a new version to take effect on the date

that you specify. You can update your account number for the taxing authority,

tax rate, wage base, and the reporting requirements for each legal entity the tax

code applies to. This helps when you know in advance that the tax rate will

increase on a specific date, and you want to make sure that workers are taxed at

the correct rate when the rate change takes effect.


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Demonstration: Configure a Tax Code

This demonstration shows how to enter company-specific information for a tax

code.

Demonstration Steps

1. Enter tax code details.

a. Click Payroll > Setup > Taxes > Tax codes.

b. Select the tax code to update from the list of tax codes on the

left side of the Tax codes form.

c. In the Tax code details FastTab, in the General tab, enter

information about the legal entity and the taxing criteria.

i. In the Legal entity field, select the legal entity that you

are entering information for.

ii. In the Report description field, optionally enter a

description of the tax. The description you enter is used

on pay statements and other reports instead of the

default tax description. Leave this field blank to use the

default tax description.

iii. In the Wage base field, enter the earnings value to use

as the basis for calculating taxes. Some tax authorities do

not require a wage base.

iv. In the Rate field, enter the rate the legal entity pays. For

example, if the taxing rate is 1.8 percent, enter "0.018".

2. Enter accounting and vendor information.

a. In the Tax code details FastTab, in the Accounting tab, define

the tax authority's vendor account and the rules for posting the

tax withholdings to the general ledger.

i. In the Vendor field, enter the vendor account for the

agency that the tax is paid to. Leave the Vendor field

blank to manually create tax payment invoices.

ii. In the Project category field, enter the category to post

tax amounts to in a project. If the tax code will never be

used for transactions that are posted to a project, leave

the field blank.


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iii. In the Default financial dimensions group, enter the

default financial dimensions to use for the main account

when you post the transaction.

iv. In the Main account field, enter the main account that

this tax should post to. For employer taxes, enter the

main account where employer tax expenses are posted

to. For worker taxes, enter the main account where the

tax withholding liability is posted to.

3. Repeat steps 1c and 2a for each legal entity that the tax code applies

to.

General Ledger Setup

Many standard general ledger features that support Payroll in Microsoft

Dynamics AX are already set up before the Payroll module is set up. These

include ledger accounts, accounting distributions, the payroll journal, and the

rules for posting accounting entries to the general ledger.

Setting Up a Payroll Journal

A journal consists of debit and credit transactions. For payroll processing, the

journal contains transactions for the pay statement that is generated during

payroll processing. Some modules use journals to create and work with entries

before the entries are posted. For the Payroll module, a special Payroll

disbursement journal type is used.

Journals are set up by using the Journal names form in the General ledger

module. Click General ledger > Setup > Journals > Journal names to open the

form. A Payroll disbursement journal type requires you to enter a bank account

for the offset account. The bank account is the account the payments are issued

from.

After the journal is set up, an administrator enters the journal in the Payment

journal name field on the Payroll parameters form, in the Payment issuance

page.

Setting Up a Batch Transfer Rule for Payroll

Batch transfer rules determine how accounting entries on a document post to the

general ledger. For Payroll processing, the pay statement contains the entries that

post. Use the General ledger parameters form, and the Batch transfer rules

page to define the rules for posting pay statements.


2 - 23

Click General ledger > Setup >General ledger parameters to open the form.

When pay statements are posted to the general ledger, they can be posted in

either summary or detail. If you select to summarize the entries, then the pay

statement lines with the same dates, currency, and ledger accounts are combined

into a single accounting entry.

The payroll batch transfer rule also determines whether the pay statement lines

are transferred immediately to the general ledger. Asynchronous transfers can

take some time to transfer, whereas synchronous transfers occur immediately on

posting. If you select to post immediately, you cannot summarize payroll

accounting entries.

About Posting Definitions

A posting definition consists of rules that are defined to generate balanced

ledger entries, accounts and, or dimensions that are system-generated. You can

apply the rules to account numbers and financial dimensions on an accounting

distribution on the source document line, such as a pay statement. To use the

Payroll module in Microsoft Dynamics AX, a payroll posting definition must be

defined. A posting definition is created on the Posting definitions form and is

made up of match criteria and generated entries.

When a match exists between the accounts that are entered in the match criteria

and the accounts or dimension values that are entered in the transaction, ledger

entries are generated based on the generated entries that are specified on the

posting definition.

Note: An originating entry is a collection of transaction line properties. These

properties include the combination of main account and financial dimensions and

the transaction date. A system-generated entry is also a collection of properties.

The system-generated entry depends on the posting definition that you set up.

Your company's accounting or finance manager sets up the posting definitions

for payroll expenses. The rules set up in the posting definition create the

balancing entries for the payroll-related originating entries that are created when

a pay statement is posted to the general ledger.

Accounts Payable Setup

The Accounts payable module issues payments to workers, either by check or

direct deposit. When you process a pay statement, vendor invoices are created in

Accounts payable. Then, the invoice is processed and paid based on the

preferred method of payment for the worker.

Vendor invoices require both a vendor account to represent the party being paid

and a procurement category to describe the payment line items.


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Disbursement Account and Payment Procurement

Category

Vendor invoices are created and paid through the Accounts payable module to

pay workers' wages. Vendor invoices require a vendor account. Therefore, you

must create and assign a vendor account to use on the invoices that you

generate during payroll processing. You do not have to create a vendor account

for each worker. One vendor account is used to process all payments.

You create the vendor account by using the Vendors form. This form only

requires that the account have a name, account number, and group. Typically, a

name such as "Payroll vendor" is used to identify the account so that it is not

unintentionally used by nonpayroll or Human resources users.

Specify the Payroll Vendor Account and the Procurement Category

Use the Payroll parameters form to identify the vendor account and the

procurement category to use for the payments your company issues to workers.

Click Payroll > Setup > Parameters > Payroll parameters to open the form.

Click the Payment issuance link to identify the Accounts payable features that

are required by the Payroll module.

After the vendor is created, the account is identified as the vendor account for

payments by entering it in the Vendor account for work payments field on

Payment issuance page.

Vendor invoices also require a code to describe each line item. The descriptive

code is the procurement category and you can specify the code to use for worker

payments in the Procurement category field. Typically, the Payroll category is

used.


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Module Review

When you first prepare to process payroll, you must set up the earning code, pay

cycles, taxes, and the calculation frequencies for your organization. Setting up

this information helps make sure that workers are paid the appropriate rate and

that the appropriate tax amounts are recognized before payments are issued.

Additionally, you used the Maintain versions form to enter date-effective

changes for a record.

Test Your Knowledge


1. You must create earning codes for which of the following earning types?

( ) Salary and hourly wages

( ) Vacation

( ) Bonuses

( ) Allowances

( ) All the options that are listed.

2. You cannot change a pay period's payment date after it is set on the Pay

cycles and pay periods form.

( ) True

( ) False

3. One earning code can be used by multiple legal entities.

( ) True

( ) False

4. You must create a tax code for each possible payroll tax.

( ) True

( ) False


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5. Which of the following is the best way to change the earning code, if the rate

on the earning code will change in the future?

( ) Delete the current earning code and create a new one when the rate

change takes effect.

( ) Create a new earning code to make up the difference between the

current rate and the future rate.

( ) Use the Maintain versions feature to set the current rate to expire

and the new rate to take effect on a specific date.

( ) None of the options that are listed.


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1. You must create earning codes for which of the following earning types?

( ) Salary and hourly wages

( ) Vacation

( ) Bonuses

( ) Allowances

(√) All the options that are listed.

2. You cannot change a pay period's payment date after it is set on the Pay

cycles and pay periods form.

( ) True

(√) False

3. One earning code can be used by multiple legal entities.

(√) True

( ) False

4. You must create a tax code for each possible payroll tax.

( ) True

(√) False

5. Which of the following is the best way to change the earning code, if the rate

on the earning code will change in the future?

( ) Delete the current earning code and create a new one when the rate

change takes effect.

( ) Create a new earning code to make up the difference between the

current rate and the future rate.

(√) Use the Maintain versions feature to set the current rate to expire and

the new rate to take effect on a specific date.

( ) None of the options that are listed.


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3 - 1

MODULE 3: BENEFITS SETUP

Module Overview

In Microsoft Dynamics® AX 2012 R2, the benefits features provide a set of tools

that are used to maintain the benefits, deductions, and workers' compensation

plans that an organization offers or processes for its workers.

Before workers are enrolled in benefits, you must create the components of each

benefit. These benefit elements group similar benefit plans and establish default

settings such as deduction rates and accounting details. Many of these settings

can be adjusted when workers are later enrolled in the benefit. For each benefit

plan, the organization can offer several enrollment options, or the worker can

waive enrollment in the plan.

In Microsoft Dynamics AX 2012 R2, benefits are not restricted to benefits such as

dental insurance and prescription medication plans. You can use a benefit to

track and maintain garnishments and tax levies that are ordered against a worker.

Additionally, you can create a benefit to process workers' compensation plan

contributions that the company makes to the states that it does business in.

For benefits such as paid sick and vacation time, where the employee builds time

in the benefit by working, benefit accrual plans can also be set up. Workers

accrue hours in the plan, and they can use them for sick time, vacation, and other

paid time off.

Although the initial processing of benefits requires significant set up time, this

gives benefit administrators a flexible means to process benefits and deductions

for a large work force.

Objectives

The objectives are:

Define the three elements that make up a benefit—types, plans, and

options.

Define company contribution rates for retirement benefits.

Create benefits that workers can enroll in.

Set up benefit accrual plans for vacation and other paid time off.

Define how to calculate a worker's disposable income for

garnishment calculations.


3 - 2

Benefit Elements

Before you begin to create benefits and enroll workers in them, you must define

the elements that make up a benefit—the type, plan, and options.

Type – A collection of plans for a specific benefit, such as medical or

parking.

Plan – A specific benefit contracted from a provider.

Option – The coverage level, such as employee only or employee and

spouse.

For each type of benefit, such as vision or dental, the organization can decide to

offer one or more plans to the workers. For each plan, the company can offer

different options. For example, workers can buy additional term life insurance

coverage at one, two, or three times their yearly salary. Each plan-option

combinations become a benefit that the worker can enroll in.

FIGURE 3.1:THE ELEMENTS OF A BENEFIT

All benefit elements are defined on the Benefit elements form. Click Payroll >

Setup > Benefits > Benefit elements to open the form.

Benefit Types

Use the Types page on the Benefit elements form to define benefit types.

Benefit types, such as medical or parking, are groups of related benefit plans. You

can also create benefit types for deductions, such as wage garnishments and tax

levies.

Module 3: Benefits Setup

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Fields Description

Type The name of a benefit type, such as dental

or retirement.

Description A description of the benefit type or

option.

Concurrent enrollment Select one of the following:

Multiple enrollments per type – You

can enroll a worker in multiple plans

with the same benefit type, even if

the enrollment is effective for the

same period. For example, two term

life insurance plans.

One enrollment per type – You

cannot enroll a worker in more than

one plan with the same benefit type

for the same period. For example, if

the worker already has health

insurance for a specified time period,

you cannot assign another health

insurance that covers the same

period.

Payroll category Select a payroll category for the

benefit type. Different types of

benefits require different payroll

settings. The payroll category

determines which settings are shown

on the Plans page of this form. To

simplify setup, settings that do not

apply to the payroll category are

unavailable.

The available categories include the

following:

None

Standard

Retirement

Workers' compensation

General liability

Garnishment

Tax levy


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Demonstration: Defining a Benefit Type

This demonstration shows how to create a benefit type.

Demonstration Steps

1. Create a benefit type.

a. Click Payroll > Setup > Benefits > Benefit elements.

b. In the Types area, click New.

c. In the Type column, enter the name of the type of benefit. For

example, enter "Flex spending" for a flexible spending account

benefit.

d. In the Description column, enter a short description of the

benefit type.

e. In the Concurrent enrollment column, select whether workers

can enroll in more than one plan for the same benefit type.

f. In the Payroll category column, select the category that best

describes the benefit type.

Benefit Plans

Use the Plans page on the Benefit elements form to define the specific benefit

plans the organization offers. A benefit plan is a specific benefit that a provider is

contracted to offer. You can create multiple plans for each type of benefit that

the organization offers. Additionally, you can create plans so that workers can

waive their enrollment in a particular type of benefit.

The FastTabs and fields that are available on the Plans page are described in the

following tables.

Fields

Fields Description

Plan The name of a benefit plan.

Description A description of the benefit plan.

Type The benefit type. Benefit types are created

on the Types page of this form.


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Fields Description

Payroll impact The manner that the benefit plan affects a

worker's earnings and a company's

expenses. Select one of the following

options:

None – No amounts are contributed by

the employer or deducted from the

employee’s pay. This option is typically

selected for plans that a worker can

select to waive their enrollment in a

benefit.

When this option is selected, all the

FastTabs on this form, together with the

payroll-related FastTabs on the

Benefits form and the Maintain

benefits form, are hidden. For benefit

types that are set up with the None

payroll category, you cannot select a

different option in this field.

Deduction only – An amount is

deducted from the employee’s pay for

this benefit, but no employer

contribution is made.


fields that are related to employer

contributions on this form, on the

Benefits form, and the Maintain

benefits form, are hidden.

Contribution only – An employer

contribution is made for this benefit,

but no amount is deducted from the

employee’s pay.


fields that are related to payroll

deductions on this form, on the

Benefits form, and on the Maintain

benefits form, are hidden.

Deduction and contribution – An

employer contribution is made for this

benefit, and an additional amount is

deducted from the employee’s pay. This

field is always set to Deduction only

for garnishments and tax levies.

Tax Rule FastTab


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This FastTab is available for all plans with deductions or contributions.

Fields Description

Pretax basis Select the pattern of before-tax and after-

tax deductions and contributions that are

used by the benefit plan.

For example, select Roth 401(k) for a Roth

401(k) plan or for any other benefit plan

that is administered the same as a Roth

401(k) for tax purposes.

Select Custom to select the taxes that the

benefit plan is exempt from in the Custom

field group, instead of using a predefined

pattern.

Custom Select the check box for each tax that the

benefit plan is exempt from. These options

are available only when the Pretax basis

field is set to Custom.

When you specify that a benefit plan is

exempt from state and local income taxes,

taxes will not be calculated for that benefit

plan for any state or local income tax. If the

benefit plan is taxable in some states but

not in other states, you must create two

versions of the benefit plan.

For example, if a plan is taxable in every

state except Colorado and Illinois, you

would create two plans that are identical,

except that the State income tax check box

is selected for one and cleared for the other.

In the description of the plan that has the

check box selected, enter for use in CO and

IL. In the description of the plan that has the

check box cleared, enter not for use in CO

and IL.


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Retirement Plans FastTab

This FastTab is available only when the payroll category assigned to the benefit

type is Retirement.

Fields Description

Retirement type Select the type of retirement benefit.

Contribution method Select the method to use to calculate

contributions for this benefit plan.

Note: The worker deduction and employer

contribution rates are determined by the rate

table that is defined in the Contribution

calculation rates form and assigned to the

benefit on the Benefits form.

Fixed percent – The employer contribution

is calculated by multiplying the employer

contribution rate by the applicable employee

earnings. Only the earning codes that are

specified on the benefit are considered.

For example, suppose that the rate for the

worker deduction is .03, and the rate for the

employer contribution is .02. The employer

contribution would be .02, or 2 percent of

the employee earnings. For this option, the

worker deduction amount and the employer

contribution amount are calculated

separately.

Percent of employee – The employer

contribution is calculated by multiplying the

employer contribution rate by the worker

deduction rate. For example, suppose that

the worker deduction rate is .03, and the

employer contribution rate is .5. The

employer contribution would be .03 * .5 =

.015, or 1.5 percent of the applicable

employee earnings.


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Fields Description

Contribution limit Select the value that the maximum contribution

for this benefit plan is based on:

None – There is no contribution limit.

Employee limit – The employer contribution

stops when the employee’s payroll deduction

limit is reached. For the payment in which

the deduction limit is reached, the employer

contribution is proportionally limited. That is,

if only half of the expected employee

deduction can be made before the limit is

reached, then only half of the employer

contribution is made.

Fixed – The employer contribution limit is a

fixed amount for every calendar year. The

amount is set in the Contribution limit field

on the benefit plan.

Combination – Both the employee limit

method and the fixed method are evaluated,

and whichever limit method reaches the limit

first will limit the employer contribution.

The actual amount of the contribution limit is

entered on the Payroll details FastTab.

Payroll Details FastTab


Fields Description

Lock pay statement When this check box is selected, pay statement

lines that include the selected benefit plan

cannot be changed.

Note: Pay statement lines that include the

benefit plan can be deleted, and additional lines

that include the benefit plan can be added to the

pay statement.


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Fields Description

Recover arrears When this check box is selected, arrearages that

are created for this benefit plan are recovered in

future payroll runs.

Note: This field is available only for benefit

plans that are in the Standard payroll category.

This field is not available for garnishments and

tax levies. Arrears for garnishments and tax levies

are handled by the government entity that

imposed the order.

Deduction method Select the method to use to determine the

deduction amount if the employee’s pay is

insufficient to cover the whole amount of the

deduction for the selected benefit plan:

All or nothing – If the whole amount of the

deduction cannot be made, nothing is

deducted. The whole amount is put in

arrears.

Partial – Deduct as much of the deduction

amount as possible. Any remaining amount

is put in arrears. This field is always set to

Partial for garnishments and tax levies.

Payment type:

Primary

Additional

Gross up

Select at least one payment type. Deductions and

contributions for the selected benefit plan will be

included in payroll calculations for payroll runs

that result in the payment types that you select.


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Fields Description

Deduction priority

Assign a number to designate the default order

that deductions for benefits are made, in relation

to other deductions.

Amounts are deducted from pay statements

starting with the benefit that has the lowest

deduction priority number. When multiple

benefits have the same number, the deductions

for those benefits are made in alphabetical order.

Note: Certain benefits are considered

mandatory deductions in some states, and those

benefit plans should have the highest deduction

priority (and therefore the lowest deduction

priority number).

In many states, deductions for garnishments and

tax levies must be made before deductions for

any other benefits are made. In all states, the

relative priority of the different types of

garnishments and tax levies are the same. Their

deductions are typically made in the following

order:

1. Child support

2. Bankruptcy

3. Federal administrative

4. Federal tax levy

5. Student loan

6. State tax levy

7. Local tax levy

8. Creditor

The deduction priority can also be affected by the

order in which garnishments are received.

By default, the value in this field is entered in the

Maintain benefits form when the worker is

enrolled in the benefit. You can change the value

for the worker at the time of enrollment or at any

other time.

If you change the default value on this form, the

value on benefits that are already assigned to

workers will not change. Those values must be

changed individually.


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Fields Description

Default deduction limits:

Limit period

Limit amount

The Limit amount is the maximum amount that

can be deducted from an employee’s pay for the

selected benefit during the specified Limit

period. If there is no maximum amount, leave

these fields blank.

The limit period is calendar-based. The year is

January 1 through December 31, the first quarter

is January 1 through March 31, and so on. A fiscal

calendar is not supported for these limits.

By default, the values in these fields are entered

on the Maintain benefits form when the benefit

is assigned to a worker. If you change the value

here, the value will not change on benefits that

are already assigned to workers. Those values

must be changed individually.

Default contribution

limits:

Limit period

Limit amount

The Limit amount is the maximum amount of

the employer contribution for the selected

benefit during the specified Limit period. If

there is no maximum amount, leave these fields

blank.

The limit period is calendar-based. The year is

January 1 through December 31, the first quarter

is January 1 through March 31, and so on. A fiscal

calendar is not supported for these limits.

By default, the values in these fields are entered

on the Maintain benefits form when the benefit

is assigned to a worker. If you change the value

here, the value will not change on benefits that

are already assigned to workers. Those values

must be changed individually.


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Accounting FastTab


Fields Description

Legal entity

Select the legal entity to view the

accounting information for the selected

benefit plan and the selected legal entity. A

benefit plan can have different accounting

information for each legal entity that offers

it.

Category The project category that is used for the

employer contribution associated with the

selected benefit plan.

Vendor The vendor that payments for the selected

benefit plan are paid to.

Default financial

dimensions

The default financial dimension values for

the main account. When benefit and

deduction transactions are generated, the

values that you select here determine, in

part, the ledger account that the transaction

posts to in the general ledger.

Deductions – Main

account

The account that payroll deductions for the

selected benefit plan will post to.

This field is not available if the Payroll

impact for the benefit plan is Contribution

only.

Contributions – Main

account

The account that employer contributions for

the selected benefit plan will post to.

This field is not available if the Payroll

impact for the benefit plan is Deduction

only


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Reporting FastTab


Fields Description

Deductions

Form W-2 box

number

Form W-2 box label

If the benefit must be reported on Form W-2,

select the number of the box on Form W-2,

where the amount for the payroll deductions

for the selected benefit is reported, and enter

the label to use for the box.

Because most benefits are not reported on

Form W-2, these fields will usually be left

blank.

These fields are not available if the Payroll

impact for the benefit plan is Contribution

only.

Contributions

Form W-2 box

number

Form W-2 box label

If the benefit must be reported on Form W-2,

select the number of the box on Form W-2,

where the amount for the employer

contributions for the selected benefit is

reported, and enter the label to use for the

box.


impact for the benefit plan is Deduction

only.

Demonstration: Defining a Benefit Plan

This demonstration shows how to enter a benefit plan that has worker

deductions and employer contributions. In this example, you will create a plan for

a dental benefit. The dental benefit type is already created for you.

Demonstration Steps

1. Create the benefit plan.


b. In the Plans page, click New.

c. In the Plan field, enter the name for the plan. For example, enter

"Humongous Dental".

d. In the Description field, enter a short description of the plan.

e. In the Type field, select Dental.

f. In the Payroll impact field, select Deduction and Contribution.


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2. Define the tax and payroll details.

a. On the Tax rule FastTab, in the Pretax basis field, select how

deductions and contributions are used by the plan. For a dental

plan, you can select Section 125 for a plan that workers can pay

for health coverage before taxes are calculated for their wages.

b. On the Payroll details FastTab, define the deduction and

contribution amounts and limits.

c. Select the Lock pay statement check box to prevent the benefit

amounts from being changed on the pay statement.

d. Select the Recover arrears check box to recover arrearages from

benefits that are based on this plan.

e. In the Deduction method field, select whether partial

deductions can be made if the worker's pay is insufficient to

cover the whole deduction amount.

f. In the Payment type fields, select the payment types that

benefits based on this plan are processed in.

g. Enter a number in the Deduction priority field to establish the

preferred order that deductions for a benefit are made in relation

to other deductions.

h. In the Default deduction limits and Default contribution

limits fields, enter the maximum amount that can be contributed

or deducted for the plan in a specific timeframe.

3. Define how to account for and report the deductions and

contributions that are related to benefits based on this plan.

a. On the Accounting FastTab, in the Legal entity field, select a

legal entity that will offer the plan.

b. If the benefit plan is related to projects, select how the employer

contribution is categorized in the Category field.

c. If the benefit is offered through a provider, such as an insurance

company, select the provider's vendor account in the Vendor

field.

For example, select US-106 (Humongous Insurance).

d. Select the default financial dimensions to use for the

contributions. Typically, the default financial dimensions are set

up on the worker's position record.

e. In the Deductions and Contributions fields, select the main

account to post the deductions and contributions to.

Note: When pay statements are generated, these main accounts are

combined with the financial dimensions that are specified on the position to

determine the ledger accounts that the deduction or contribution transactions post

to.


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f. Repeat steps 3a through 3e for each legal entity that offers the

plan.

g. If the benefit must be reported on Form W-2, enter the reporting

box number and label information on the Reporting FastTab.

Benefit Options

Use the Options page on the Benefit elements form to define coverage levels

for the plans the organization offers.

When you create the actual benefit, you will create one benefit for each option in

a plan. To create a benefit for each option, you must first define the options that

will be available.

For example, on many medical benefit plans, organizations offer options for the

worker only, the worker and his or her spouse, and the worker plus his or her

family. For many benefits, you can create simple participate and waive options.

For each option, you can select the Allow dependent coverage and Allow

beneficiary designations check boxes to determine whether workers who select

an option can cover dependents with the benefit or identify beneficiaries.


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Lab A: Set Up the Components of a Benefit

Scenario

Jodi, the Compensation and Benefits Administrator at Contoso Entertainment

System USA, is responsible for setting up new benefit types, plans, and options

for the company. She must create new benefit types and plans for the following:

In the next calendar year, Contoso will begin offering a fitness benefit

plan for its workers. Contoso will contribute a flat amount every

quarter toward a local gym membership. Jodi will work with the gym

to track worker participation in the program outside Microsoft

Dynamics AX.

Contoso recently opened a warehouse in Iowa, and the state has just

ordered a levy to recover unpaid taxes against one of the warehouse

workers. Jodi must define a new state tax levy benefit type and plan

for Iowa.

Fitness Plan

For the new fitness benefit, Jodi will create a benefit type and plan. Make the

following entries when you create the new benefit elements. For each quarter,

Contoso will contribute 100.00 United States dollars (USD). The contribution

expense must post to the Employee Benefit Programs Expense main account

(602190). Make the following entries when you create the new benefit elements.

Benefit type

o Type: Fitness

o Description: Fitness benefits

o Concurrent enrollment: One enrollment per type

o Payroll category: Standard

Benefit plan

o Plan: Fitness benefit

o Description: Company gym membership

o Type: Fitness

o Limit period: Quarter

o Limit amount: 100.00

o Payroll impact: Contribution only

o Main account: 602190


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State Tax Levy

For the new state tax levy, Jodi will create a benefit type and plan. When she

defines the plan, she must specify that the plan is deduction only and assign the

plan a deduction priority so that a worker's deductions are processed in the

correct order. The deduction must post to the Payroll deductions payable

account (201130). Make the following entries when you create the new benefit

elements.

Benefit type

o Type: State Tax

o Description: State Tax Levy

o Concurrent enrollment: Multiple enrollments per type

o Payroll category: Tax levy

Benefit plan

o Plan: IA Tax Levy

o Description: Iowa State Tax Levy

o Type: State Tax

o Payroll impact: Deduction only

o Deduction method: Partial

o Deduction priority: 9

o Vendor: US_TX_007 (Iowa State Tax Authority)

o Main account: 201130

Task 1: Set Up a Benefit Type and Plan For a Gym Benefit

High Level Steps

1. Define the fitness benefit type.

2. Create the gym membership benefit plan.

3. Set up payroll details for the benefit.

4. Enter the accounting information for the benefit.

Detailed Steps

1. Define the fitness benefit type.


b. On the Types page, click New.

c. In the Type field, enter "Fitness".

d. In the Description field, enter "Fitness benefits".

e. In the Concurrent enrollment field, select One enrollment per

type.

f. In the Payroll category field, select Standard.


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2. Create the gym membership benefit plan.

a. On the left side of the Benefit elements form, click Plans.

b. On the Plans page, click New.

c. In the Plan field, enter "Fitness benefit".

d. In the Description field, enter "Company gym membership".

e. In the Type field, select Fitness.

f. In the Payroll impact field, select Contribution only.

3. Set up payroll details for the benefit.

a. Expand the Payroll details FastTab.

b. In the Limit period field, select Quarter.

c. In the Limit amount field, enter "100.00".

4. Enter the accounting information for the benefit.

a. Expand the Accounting FastTab.

b. In the Legal entity field, select USMF.

c. In the Main account field in the Contributions group, enter

"602190".

d. Click Close.

Task 2: Set Up a Benefit Type and Plan For a State Tax Levy

High Level Steps

1. Define the state tax levy benefit type.

2. Define a state tax levy benefit plan.

Detailed Steps

1. Define the state tax levy benefit type.


b. On the Types page, click New.

c. In the Type field, enter "State Tax".

d. In the Description field, enter "State Tax Levy".

e. In the Concurrent enrollment field, select Multiple

enrollments per type.

f. In the Payroll category field, select Tax levy.

2. Define a state tax levy benefit plan.

a. On the left side of the Benefit elements form, click Plans.

b. On the Plans page, click New.

c. In the Plan field, enter "IA Tax Levy".

d. In the Description field, enter "Iowa State Tax Levy".

e. In the Type field, select State Tax.


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f. In the Payroll impact field, select Deduction only.

g. Expand the Payroll details FastTab.

h. In the Deduction priority field, enter "9".

i. Expand the Accounting FastTab.

j. In the Legal entity field, select USMF.

k. In the Vendor field, select US_TX_007 (Iowa State Tax

Authority).

l. In the Main account field, enter "201130".

m. Click Close.

Contribution Calculation Rates

If the organization offers defined contribution retirement plan benefits to the

workers, you will define calculation contribution rates to set the rates that the

company will contribute to the worker plans.

Define Contribution Calculation Rates

For retirement benefits, the method that is used to determine the employer

contribution is set up when you define the elements of a benefit. The employer

contribution rates are determined by the rate table that is defined in the

Contribution calculation rates form and assigned to the benefit in the Benefits

form.

To open the form, click Payroll > Setup > Benefits > Contribution calculation

rates.

Best Practice: Before you start to enter calculation rates, create a table for

the retirement plans. For each plan, include the contribution method that is used

for the plan, together with the employee deductions and employer contributions for

the plan.

For example, suppose that the organization offers two retirement plans. For the

first plan, the organization matches the worker’s own contributions to his or her

plan at 50 percent when the employee’s election is less than three percent, and at

100 percent when more than three percent. For the second plan, the organization

contributes one percent of the worker’s pay to the 401(k) plan when the worker’s

own contributions are at least one percent but less than three percent, two

percent when the worker’s own contributions are at least three percent but less

than six percent, and three percent of the worker’s pay when the worker’s

contributions are six percent or more. The table would resemble the following.

Plan

Contribution method

Worker deduction

Employer contribution

First plan Percent of employee 0.0000 0.5000


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Plan

Contribution method

Worker deduction

Employer contribution

0.0300 1.000

Second plan Fixed percent 0.0100 0.0100

0.0300 0.0200

0.0600 0.0300

Maintaining Contribution Rate Versions

You use the Contribution calculation rates form to set up employer

contribution rates. Typically, over time, you will update rates to match new

company policies for the rates. The Contribution calculation rates form

supports the Maintain versions feature. Therefore, you can define new rates and

the dates that the rates will take effect. You can also set expiration dates for rates

that you will no longer use. Click Maintain versions to open the Maintain rate

structure versions form.

Demonstration: Entering a Contribution Calculation Rate

This demonstration shows how to set up a new contribution calculation rate.

Before you enter a rate structure, you must know the contribution method for the

benefit plan that will use this rate. The method determines how the rate is used

to calculate the plans. Therefore, it determines how you will enter the rate.

Demonstration Steps

1. Create the Contribution calculation rate record.

a. Click Payroll > Setup > Benefits > Contribution calculation

rates.

b. Click New.

c. In the Name field, enter a name to identify the rate structure you

are entering.

d. In the Description field, enter a description of the rate structure.

2. Enter the contribution rate details.

a. In the Rates area, click Maintain versions to enter the details

about the contribution rates.

Note: The contribution method that is entered on the Benefit elements form

for the retirement plan determines how the contribution rate is used to calculate

the plan.

b. In the Rates area of the Maintain rate structure versions form,


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click Add.

c. In the Worker deduction column, enter "0.0001" to identify the

lowest worker deduction rate that starts the company match for

the retirement plan.

d. In the Employer contribution column, enter the rate that the

employer contributes to the plan.

If the contribution method is Fixed percent, enter the

percentage of the worker's pay that the employer

contributes. For example, to contribute one percent,

enter "0.0100".

If the contribution method is Percent of employee,

enter the percentage of the worker deduction that the

employer will match as the contribution. For example, to

contribute at half the worker's deduction, enter "0.500".

e. Repeat steps 2b through 2d for each step in the contribution rate

structure.

Create Benefits

After you define all the necessary elements that make up a benefit, you combine

them to create a benefit that you can assign to workers. You use the Benefits

form to select the type, plan, and option for a benefit. Additionally, you define

information that is related to the benefit, such as the benefit period, worker

deductions, employer contributions, and eligibility rules.

For information about how to enroll workers in the benefits that you define, refer

to the "Worker Setup" module later in this course.

Benefits Form

Use the Benefits form to create, maintain, and enroll workers in the benefits. To

open the form, click Payroll > Setup > Benefits > Benefits.

In Microsoft Dynamics AX, benefits such as medical and dental insurance are

defined on this form. Then, later workers are enrolled in the benefit through their

worker record. Other deductions, such as garnishments, tax levies, and

administration fees are handled in the same manner as employee benefits.

Employer-paid contributions, such as workers' compensation plans are also

maintained as a benefit record.


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Buttons

Button Description

Benefit Create a benefit.

Benefits can be included in the disposable

income definitions that are used when

garnishment and tax levies are calculated. When

you create or delete a benefit, consider whether

the disposable income definitions should be

updated.

Benefit elements Open the Benefit elements form, where you

can maintain benefit types, plans, and options.

Maintain versions Open the Maintain benefit versions form.

Here you can enter date-effective changes to

the benefit plan. These changes can include

modified eligibility rules and payroll details. You

can change payroll details only for benefits that

are not in the None payroll category. You can

use this feature to create benefits in advance.

Enrolled workers Open the Enrolled workers form. Here you can

view the workers who are currently enrolled in

the benefit. You can also use a filter to view

workers previously enrolled in the benefit or

workers who are signed up for future

enrollment.

Mass benefit

enrollment

Open the Mass benefit enrollment form. Here

you can enroll multiple workers in the benefit at

the same time.

Create eligibility event Create an event that will let you determine

which workers are eligible for the selected

benefit.

For more information about benefit eligibility

rules, refer to the Human Resource Management

for Microsoft Dynamics AX course.

Add

Remove

Add an eligibility override or an earning code to

this benefit, or remove the selected eligibility

override or earning code from this benefit.

When you add an eligibility override, the

selected worker is eligible for the benefit, even if

the eligibility rule determines that the worker is

not eligible. When you add an earning code,

earnings related to the code are used when

deductions and contributions for the benefit are

calculated for payroll.


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Button Description

Add all earning codes Add all earning codes to this benefit.

When you add an earning code, earnings

related to the code are used when deductions

and contributions for the benefit are calculated

for payroll.

Fields

General FastTab

Field Description

Payroll category The payroll category for the benefit type.

Different types of benefits require different

payroll settings. The payroll category

determines which settings are shown on the

Plans page of this form. To simplify setup,

settings that do not apply to the payroll

category are unavailable.

Type

Plan

Option

A benefit is a combination of a benefit type,

plan, and option:

Type – The benefit type contains a set of

related benefit plans, such as medical or

parking.

Plan – The specific benefit that a provider is

contracted to offer, such as the preferred

provider plan from Humongous Insurance.

Option – The option that is assigned to the

benefit plan. Options are typically coverage

levels for the plan, such as “employee-only”

or “employee and spouse.” Benefit options

are assigned to benefits when they are

created.

Effective

Expiration

The effective and expiration dates determine

the date range that the benefit is available to

the workers:

Effective – The first day that the benefit is

available to the workers.

Expiration – The last day that the benefit is

available to the workers. If there is no

expiration date, click the calendar icon, and

then click the Never button.

Eligibility Rules FastTab


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Field Description

Eligibility The method that determines which workers are

eligible for the benefit:

All workers are eligible – The benefit is

included in eligibility processing, but

eligibility rules are not enforced for the

benefit. All workers are always eligible.

When you select this method, any worker

who is included in an eligibility event can

enroll in the benefit after the event is

processed, but not at any other time. This

lets you restrict enrollment in the benefit to

appropriate enrollment periods, without

otherwise limiting eligibility for the benefit.

Rule based – User-defined eligibility rules

will be enforced for the benefit. Select the

rule type to use from the Rule type list.

This method is used for most benefits.

Bypass eligibility process – The benefit is

not included in eligibility processing. Any

worker can be enrolled in the benefit at any

time. You do not have to process an

eligibility event before you enroll a worker

in the benefit.

This method is usually used for

garnishments and tax levies.

Rule type The rule type assigned to the benefit. Rule types

are created and maintained in the Benefit

eligibility policy rule types form.

This field is available only if the Eligibility field

is set to Rule based.

Eligibility Overrides FastTab

Field Description

Name

Personnel number

The name and personnel number of the worker

who has a benefit eligibility override.

Override start

Override end

The first and last date on which the worker is

eligible for the benefit based on the override.

Payroll Details FastTab

This FastTab can include settings only for deductions, or only for contributions, or


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for both deductions and contributions. This depends on how the Payroll impact

field in the Benefit elements form is set for the benefit plan. If the Payroll

impact field is set to None, this FastTab is not available.

Field Description

Frequency The payroll calculation frequency that is used to

determine the pay periods that the selected benefit is

calculated in.

Payroll calculation frequencies and pay periods are

defined in the Payroll calculation frequencies form.


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Field Description

Basis

Select the option to use with the value in the Amount or

rate field to determine the amount to deduct or

contribute for the benefit. The amount is calculated only in

the pay periods that are determined by the payroll

calculation frequency. Earnings are included in the

calculation only when the earning code for the earnings is

listed on the Earning basis FastTab and when the

required parameters are set up in the Earning codes form.

Fixed amount – Deduct or contribute the specified

amount. Earnings are not considered in the

calculation.

Percent of earnings – Apply the specified percentage

to all included earnings.

Productive hours – Apply the specified percentage to

included earnings that are designated as Productive.

Earning hours – Multiply the specified rate by the

number of hours that are associated with included

earnings that have a Unit of measure set to Hours.

Regular portion of all pay – Apply the specified

percentage to the base portion of all included

earnings. The base portion is determined by the Base

definition:

o Not applicable – 0%

o Base time – 100%

o Time and a half – 66.6666%

o Double time – 50%

Regular hours – Apply the specified rate to included

earnings that have a Unit of measure set to Hours

and a Base definition set to Base time.

Regular earnings – Apply the specified percentage to

included earnings that have a Base definition set to

Base time.

Total hours – Multiply the specified rate by the

number of hours that are associated with included

earnings that have a Unit of measure set to Hours in

the Earning codes form.

The value in this field is used as the default. value in the

Maintain benefits form for each worker who is enrolled

in the selected benefit.


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Field Description

Amount or rate

Enter the amount or rate to use with the value in the Basis

field to determine the amount to deduct or contribute for

the benefit.

If the Basis for the deduction is Fixed amount, enter

the amount to use as the payroll deduction or

employer contribution for the selected benefit.

If the Basis for the deduction is Percent of earnings,

Regular portion of all pay, or Regular earnings,

enter the percentage of the worker’s included

earnings or pay to use as the payroll deduction or

employer contribution for the selected benefit.

Percentages must be entered as a decimal. For

example, enter "0.0300" for three percent.

If the Basis for the deduction is Productive hours,

Earning hours, Regular hours, or Total hours, enter

the hourly rate for the payroll deduction or employer

contribution.

The value in this field is used as the default value in the

value in the Deduction or Contribution field in the

Maintain benefits form for each worker who is enrolled

in the selected benefit.

This field is not available when the payroll category

assigned to the benefit type in the Benefit elements form

is Retirement.

Calculation rate

The variable rate structure that is used to calculate

employer contributions to a retirement plan.

This field is available only when the payroll category

assigned to the benefit type in the Benefit elements form

is Retirement.

Rate structures are defined in the Contribution

calculation rates form.


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Earning Basis

Field Description

Earning code Only earning lines that have an earning code

that is listed here can be included when

deductions and contributions for this benefit

are calculated.

Additionally, the Basis setting on the Payroll

details FastTab, in combination with the

parameter settings in the Earning codes

form, are also used to determine whether a

specific earnings line is included in the

calculation.

If the Basis is Fixed amount, the earning

codes that are listed here do not affect the

amount of the deduction. However, if no

earning codes are listed, and if the basis is

changed from Fixed amount to any other

value in the Maintain benefits form, the

calculated deduction for the benefit for that

worker would be zero. Therefore, we

recommend that you enter appropriate

earning codes for every benefit.

Description A description of the earning code.

Demonstration: Maintaining a Medical Benefit

This demonstration shows how to maintain the deductions and contributions on

an existing medical benefit.

Demonstration Steps

1. Open the Maintain versions form for a medical benefit.

a. Click Payroll > Setup > Benefits > Benefits.

b. Select a medical benefit to modify on the Benefits list page

(Type=Medical).

c. Click Maintain versions in the Versions group of the Action

Pane.

2. Update the deduction and contributions for the benefit.

a. On the Payroll details tab of the Maintain benefit versions

form, click Add.

b. In the Effective and Expiration fields, enter the period that the

new contribution and deduction amounts will be in effect.


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c. In the Deduction fields, enter the new amount and the

frequency for the deductions.

d. In the Contributions fields, enter the new amount and the

frequency for the employer contributions to the benefit.

e. Click Close.

Garnishments, Tax Levies, and Workers' Compensation

Plans

In Microsoft Dynamics AX, garnishments and tax levies are handled in the same

manner as worker benefits. To deduct an amount from a worker's earnings for a

taxing authority, you can create a benefit to make that deduction.

You must have at least one benefit type and one benefit plan for garnishments,

and at least one benefit type and one benefit plan for tax levies. You can choose

to have additional benefit types and benefit plans for different garnishments and

tax levies. However, you do not have to. Additionally, if the organization charges

an administrative fee for handling garnishments and tax levies, you must have at

least one benefit type and benefit plan for the fee. Garnishments and tax levy

benefits are also typically set up to bypass any eligibility rules the organization

might use.

The following demonstration shows how to create a tax levy benefit, but steps

can easily be applied to garnishments and administrative fees. When you create

the benefit, you can set a default deduction amount or rate. When you enroll a

worker in the garnishment or tax levy benefit, you can change the deduction

amount to fit the worker's specific situation.

About Workers' Compensation Plans

Similar to garnishments, workers’ compensation plans are handled in the same

manner as other employee benefits. The only difference is that the benefit

typically is contributed to by only the employer. If the organization does business

in multiple states, you must create a separate benefit for each state.

Demonstration: Setting Up a Tax Levy

This demonstration shows how to create a tax levy benefit.

Demonstration Steps

1. Define the benefit record.

a. Click Payroll > Setup > Benefits >Benefits.

b. On the Benefits list page, click Benefit in the New group of the

Action Pane.


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c. In the Plan field, select a benefit plan that is for a garnishment

benefit type. For example, select State Tax.

d. In the Option field, select Participate.

e. In the Effective field, select the date the benefit will be available.

f. Optionally, if the levy benefit must expire at some future date,

enter the date in the Expiration field.

g. Click Create benefit.

2. Enter details about the benefit.

a. On the Benefits form, click Edit in the Maintain group of the

Action Pane.

b. Expand the Payroll details FastTab.

c. In the Basis field, select what the payroll deduction for the levy is

based on. For example, if the state requires a percentage to be

deducted from the worker's earnings, select Percent of

earnings.

d. In the Amount or rate field, enter the flat amount or percentage

that is deducted for each pay period. For example, if seven

percent is deducted for this levy, enter "0.07000".

3. If the deduction is based on a percentage of worker earnings, specify

the earning codes to use as the earning basis.

Note: If the deduction is a flat amount, you do not have to enter an earning

basis.

a. Expand the Earning basis FastTab.

b. Click Add.

c. In the Earning code field, select an earning code that the levy

percentage will be calculated against. To select all available

earning codes, click Add all earning codes.

d. Repeat steps 3b through 3c for all earning codes that the

deduction is based on.

e. Click Close.


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Lab B: Working With Benefits

Scenario

Contoso Entertainment System USA United States will soon start offering a Roth

401(k) retirement plan as an alternative to the company's current 401(k)

retirement plan. Jodi, the Benefits and Compensation Administrator, must create

the new benefit so that workers can choose to participate in the plan during the

next open enrollment period. To create the benefit, use the information in the

following Notes section.

Objectives

The objectives are:

Define a new benefit plan on the Benefit elements form.

Define a new contribution calculation rate for the retirement plan.

Create the benefit that workers can later enroll in.

Lab Setup

Use the following information to create the new benefit.

Benefit Plan

The new Roth 401(k) plan shares much in common with Contoso's existing 401(k)

plan. Workers will contribute to the plan through a deduction based on a

percentage of their earnings. The plan is administered by Contoso's preferred

investments provider Humongous Insurance (Vendor account US-106).

Employer contributions to the plan are associated with the Payroll project

category and should post to the Pension/Profit-Sharing Plan Expense main

account.

Use the following list to create the plan on the Benefit elements form.

Plan: Roth 401(k)

Description: Company Roth 401(k) plan

Type: Investment

Payroll impact: Deduction and contribution

Tax rule FastTab

o Pretax basis: Roth 401(k)


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Retirement plans FastTab

o Retirement type: 401(k)/Roth 401(k)

o Contribution method: Percent of employee

o Contribution limit: Employee limit

Payroll details FastTab

o Deduction method: All or nothing

o Payment type: Primary

o Deduction priority: 10

Accounting FastTab

o Vendor: US-106 (Humongous Insurance)

o Deductions: Main account: 201130 (Payroll Deductions Payable)

o Contribution: Main account: 602180 (Pension/Profit-Sharing

Plan Expense)

Contribution Calculation Rate

Create a new contribution calculation rate for the new retirement plan. Contoso

has decided to match 50 percent of worker deductions for the plan up to 5

percent of worker earnings. Name the new rate "Roth 401(k)." Use the following

table to enter the contribution rate structure on the Contribution calculation

rates form.

Worker deduction Employer contribution

0.0500 0.5000

Benefit Details

When you create the benefit, select the Roth 401(k) plan you created on the

Benefit elements form and select the Participate option. When you set up the

payroll details for the benefit, select the Roth 401(k) contribution calculation rate

you created. You do not have to enter a deduction rate or an amount for the

benefit—workers will select the rate when they enroll in the retirement plan.

Finally, when you define the earning codes that start the deductions and

contributions for the plan, add the following earning codes.

Regular

Overtime

Double time

Sick

Holiday

Jury Duty


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Vacation

Exercise 1: Create a Roth 401(k) Retirement Plan

Task 1: Define the Benefit Plan Element

High Level Steps

1. Define the benefit plan.

2. Define the tax and contribution rules.

3. Define the payroll and accounting details for the plan.

Detailed Steps

1. Define the benefit plan.

a. Click Payroll > Setup > Benefits >Benefit elements.

b. Click Plans to open the Plans page.

c. On the Plans page, click New.

d. In the Plan field, enter "Roth 401(k)".

e. In the Description field, enter "Company Roth 401(k) plan".

f. In the Type field, select Investment.

g. In the Payroll impact field, select Deduction and contribution.

2. Define the tax and contribution rules.

a. Expand the Tax rule FastTab.

b. In the Pretax basis field, select Roth 401(k).

c. Expand the Retirement plans FastTab.

d. In the Retirement type field, select 401(k)/Roth 401(k).

e. In the Contribution method field, select Percent of employee.

f. In the Contribution limit field, select Employee limit.

3. Define the payroll and accounting details for the plan.

a. Expand the Payroll details FastTab.

b. In the Deduction priority field, enter "10".

c. Expand the Accounting FastTab.

d. In the Legal entity field, select USMF.

e. In the Vendor field, select US-106 (Humongous Insurance).

f. In the Main account field for Deductions, select 201130.

g. In the Main account field for Contributions, select 602180.

h. Click Close.

Task 2: Define a New Contribution Calculation Rate

High Level Steps


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1. Create the contribution calculation rate record.

2. In the Rates area, enter the details about the contribution rates.

Detailed Steps

1. Create the contribution calculation rate record.

a. Click Payroll > Setup > Benefits > Contribution calculation

rates.

b. Click New.

c. In the Name field, enter "Roth 401(k)".

d. In the Description field, enter "Roth 401(k) matching rates".

2. In the Rates area, enter the details about the contribution rates.


b. In the Rates area of the Maintain rate structure versions form,

click Add.

c. In the Worker deduction column, enter "0.0500".

d. In the Employer contribution column, enter "0.5000".

e. Click Close.

Task 3: Create the Benefit

High Level Steps

1. Create a new benefit record.

2. Set up the payroll details for the retirement plan.

3. Enter the earning codes that start the worker deduction and

employer contribution.

Detailed Steps

1. Create a new benefit record.

a. Click Payroll > Setup > Benefits > Benefits.

b. On the Benefits list page, click Benefit in the New group of the

Action Pane.

c. In the Plan field, select Roth 401(k).

d. In the Option field, select Participate.

e. In the Effective field, select today's date.

f. Click Create benefit.


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2. Set up the payroll details for the retirement plan.

a. On the Benefits form, click Edit in the Maintain group of the

Action Pane.

b. Expand the Payroll details FastTab.

c. For both deductions and contributions make sure that the

Frequency fields are set to all pay periods, and the Basis fields

are set to Percent of earnings.

d. Leave the Amount or rate field set to "0.0000".

e. In the Calculation rate field, select Roth 401(k).

3. Enter the earning codes that start the worker deduction and

employer contribution.

a. Expand the Earning basis FastTab.

b. Click Add.

c. In the Earning code field, select Regular.

d. Repeat steps b through c for all earning codes that the

deduction is based on.

e. Click Close.

Benefit Accrual Plans

Benefit accrual plans are sets of rules that determine how benefit hours, such as

sick leave or paid time off (PTO) are accrued over time. The rules also determine

when those leave hours can be used and whether any number of hours can be

carried over to a new year. The benefit accrual plan is associated with earning

codes. When these earning codes are included in a pay statement they reduce

the plan balance for a worker.

About Benefit Accrual Plans

Workers accrue hours in a plan throughout the year based on the number of

hours they work. Typically, plans have a maximum number of hours that a worker

can accrue in a single year.

When a worker uses the hours that he or she has accrued, the payroll process will

reduce the worker's balance in the plan. You must associate the benefit accrual

plan with the earning codes that will reduce the worker balance. For example,

when a worker takes vacation, the vacation earning code appears on the worker's

pay statement and his or her vacation plan balance is reduced.

If certain departments or workers accrue hours at different rates, you can create

separate plans for each and enroll the workers in that specific plan.


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You can use the Benefit accrual plans form to create a series of rate steps so

that workers can accrue plan hours at different rates. This depends on the length

of time that the worker is employed with the company. The length of time that

the worker is employed can be determined by the worker's employment date or

seniority date.

About the Benefit Accrual Plans Form

Use the Benefit accrual plans form to create and maintain the organization's

accrual plans. To open the form, click Payroll > Setup > Benefits > Benefit

accrual plans.

Best Practice: When you set up an accrual plan, start the plan at zero

months of employment. If workers do not accrue the benefit immediately after they

are hired, set the accrual rate to zero for the first step. Create the next plan step at

the point in time that the worker can start to accrue the benefit.

Header Felds

Field Description

Benefit accrual plan

Description

The name and description of the benefit

accrual plan.

Annual plan start date The first day of the current plan year. The

plan is automatically reset each year on the

anniversary of this date.

If this field is blank, the plan is not reset.

Accrue on usage To determine the number of hours that are

accrued in each pay statement for a benefit,

the total number of hours on the earnings

statement is multiplied by the hourly accrual

rate. If this check box is selected, hours that

are used from this plan are included in the

total number of hours. For example, suppose

that a plan uses the “Sick” earning code, and

a worker who is typically scheduled to work

40 hours each week is sick for one day. If the

Accrue on usage check box is selected, the

worker will accrue additional sick time. This is

based on 40 hours times the hourly accrual

rate. If the Accrue on usage check box is

cleared, the worker will accrue benefits based

on only 32 hours.

Carry forward balances If this check box is selected, hours that are

not used at the end of the plan year can be

carried forward to the next plan year.


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Plan Rules Fields

Use the fields in the Plan rules FastTab to define the rate that workers accrue

hours in the plan. You can create a series of steps based on the length of a

workers employment so that workers accrue at increased rates the longer they

stay employed with the company.

Grid headings Description

Months of employment The minimum number of months that a worker

must be employed for the selected line from

the benefit accrual plan to be applied.

Best Practice: Include a row starting at

zero months of employment. Each row ends

when the next row starts. The last row starts at

the specified number of months and does not

end.

For example, the rows in the plan might have

0, 12, and 60 for months of employment. The

rate and limits in the first row would start

when a worker is hired and be applied through

the end of his or her eleventh month. The

second row would start at twelve months and

be applied through the end of the fifty-ninth

month. The third row would start at 60 months

and be applied for as long as the worker

remains employed.

The months of employment value is

determined by either the employment start

date or the seniority date. This is specified in

the Benefit accruals form for the worker.

The employment start date is in the

Employment history form, and the seniority

date is in the Worker form.

Note: If you use the seniority date to

determine the months of employment, and the

Seniority date field in the Worker form is

blank, the worker can use hours from the

benefit accrual plan, but no hours can accrue

in the plan.


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Grid headings Description

Hourly accrual rate The number of hours that are added to the

accrual plan balance for each hour that is on

the earnings statement. For example, enter

"0.03846" for a worker who receives 10 days

off each year where the working year has 2080

hours.

Maximum accrual limit The maximum number of hours that a worker

can accrue during a plan year.

If the plan is not reset each year, this is the

maximum number of hours that a worker can

accrue in the plan over the lifetime of the plan.

Minimum balance The minimum number of hours that must be

available in the plan before a worker can use

hours from the plan. When the available

balance is less than this number, the worker

cannot use any hours from the plan until

additional hours have accrued, or until the

available balance is adjusted.

For workers to be able to use the hours before

they accrue the hours, you must enter a

negative number.

Carry-forward limit The maximum number of hours that can be

carried forward to the next plan year.

If the Carry forward balances check box is

cleared, no hours are carried forward.

Earning Codes for Plan Usage Fields

Use these fields to identify the earning codes that will reduce the worker's

balance in the plan.

Best Practice: Assign a benefit accrual plan to a single earning code, and use

the earning code for only one benefit accrual plan.

The earning code is used to verify the available balance when the earning

statement is released. It is also used to reduce the plan balance when a pay

statement line that includes the earning code is submitted for payment. If you use

the earning code for a benefit accrual on an earnings statement for a worker who is

not enrolled in the plan, no validation occurs.


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Fields Description

Earning code

Description

The name and description of the earning

code that is used to record the hours

that are used from the selected benefit

accrual plan.

Demonstration: Entering a Benefit Accrual Plan

This demonstration shows how to enter a benefit accrual plan.

Demonstration Steps

1. Create the benefit accrual plan record.

a. Click Payroll > Setup > Benefits > Benefit accrual plans.

b. Click New.

c. In the Benefit accrual plan field, enter a name for the plan.

d. In the Description field, enter a brief description of the plan.

e. In the Annual plan start date field, enter the date that accrued

hours are reset every year.

f. Select the Accrue on usage check box so that workers can

accrue more hours in the plan while they use hours from the

plan.

g. Select the Carry forward balances check box so that workers

can carry forward plan hours into the next year.

2. Define the plan rules.

a. In the Plan rules FastTab, click Add.

b. In the Months of employment column, enter "0.00."

c. In the Hourly accrual rate column, enter the rate that workers

accrue hours in this plan during the first months of employment.

d. In the Maximum accrual limit column, enter the maximum

number of hours a worker can accrue in the plan.

e. In the Minimum balance column, enter the minimum number of

hours that a worker must accrue before the worker can use the

hours. For workers to be able to use the hours before they accrue

the hours, you must enter a negative number.

f. In the Carry-forward limit column, enter the number of hours a

worker can carry forward to the next plan year.

3. Select the earning codes that reduce the worker's plan balance when

they are included in a pay statement.

a. In the Earning codes for plan usage FastTab, click Add.

b. In the Earning code column, select the earning code that will

subtract hours from the worker's plan balance.


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c. Click Close.

Lab C: Set Up a Sick Leave Benefit Accrual Plan for

Part-Time Workers

Scenario

Contoso Entertainment System USA has decided to enroll part-time workers in a

sick leave plan that differs from the plan that is currently offered to full-time

workers. Mia, the Payroll Administrator, must create the new benefit accrual plan

before she enrolls the workers in it. The new plan starts January 1, 2013.

With this new plan, part-time workers can accrue leave at a rate of one sick leave

hour for every thirty-two hours worked. The maximum leave that part-time

workers can accrue is three days each year. The workers can use the three days

before they accrue the maximum accrual and they can carry forward the three

days to the next year. Workers can still accrue sick leave while they are using sick

leave hours.

Mia will enroll workers in the plan later.

Lab Setup

The rate of one hour of accrued leave for every thirty-two hours worked is equal

to a 0.03125 hourly accrual rate.

Task 1: Create a Sick Leave Plan

High Level Steps

1. Create a new benefit accrual plan record.

2. In the Plan rules area, enter the accrual rules for the plan.

3. In the Earning codes for plan usage area, specify the earning code

that reduces the plan balance.

Detailed Steps

1. Create a new benefit accrual plan record.

a. Click Payroll > Setup > Benefits > Benefit accrual plans.

b. Click New.

c. In the Benefit accrual plan field, enter "Sick-PT".

d. In the Description field, enter "Sick leave part-time".

e. In the Annual plan start date field, enter "1/1/2013".

f. Select the Accrue on usage check box.

g. Select the Carry forward balances check box.


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2. In the Plan rules area, enter the accrual rules for the plan.

a. Expand the Plan rules FastTab.

b. Click Add.

c. In the Months of employment column, enter "0.00".

d. In the Hourly accrual rate column, enter "0.03125".

e. In the Maximum accrual limit column, enter "24".

f. In the Minimum balance column, enter "-24".

g. In the Carry-forward limit column, enter "24".

3. In the Earning codes for plan usage area, specify the earning code

that reduces the plan balance.

a. Expand the Earning codes for plan usage FastTab.

b. Click Add.

c. In the Earning code column, select Sick.

d. Click Close.

Disposable Income Definitions

To support garnishments and tax levies that can be imposed on workers, you

enter disposable income definitions. These definitions identify the earning codes

and benefits that should not be considered when calculating the worker's wages

that are subject to the garnishment.

Set Up Disposable Income Definitions

When a worker’s wages are garnished, the garnishment amount is limited to a

percentage of the worker’s disposable income. Disposable income definitions

make sure that the correct earnings and deductions are included when the

worker’s disposable income is calculated.

Most states use the federal definition for disposable income. Some states have

their own definitions, and those definitions are subject to change every year. It

can be difficult to match an organization’s earning codes and benefits to the

definitions that are used by a specific state.

Best Practice: Disposable income definitions are frequently defined by the

state. Enter the state name or abbreviation in the definition name to help make it

easy to identify the workers’ the definition applies to.

Use the Disposable income definition form to set up the definitions. To open

the form, click Payroll > Setup > Benefits > Disposable income definition.


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Demonstration: Entering a Disposable Income Definition

This demonstration shows how to enter a disposable income definition.

Demonstration Steps

1. Create the disposable income definition record.

a. Click Payroll > Setup > Benefits > Disposable income

definition.

b. Click New.

c. In the Name field, enter a name to identify the disposable

income definition.

d. In the Description field, enter a description for the definition.

2. Identify the earnings and benefits to exclude from wage calculations.

a. In the Reduce total wages by the following earnings section,

add the earning codes that should not be considered when

calculating a workers total wages.

i. Click Add.

ii. In the Earning code column, select an earning code to

include in the definition.

i. Repeat steps i and ii for each earning code.

b. In the Reduce disposable income by deductions for the

following benefits section, add the benefits that should not be

considered as disposable income.

i. Click Add.

ii. In the Benefit column, select a benefit to include in the

definition.

iii. Repeat steps i and ii for each benefit to include.


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Module Review

The benefits features in Microsoft Dynamics AX are flexible and help make sure

that worker benefits can easily be tracked and maintained. Defining the three

elements of a benefit reduces the amount of repetitive entry when you are

creating the benefits that workers can enroll in. After you create the benefits, you

can use the Maintain versions form to set future changes for each benefit

without having to create the benefit again.

Benefits also provide for tracking and enforcing garnishments, tax levies, and

other deductions that you might be required to process for the organization's

work force. You can also create disposable income definitions to correctly

calculate the available worker earnings that can be garnished.

Test Your Knowledge


1. The benefit options element is used to group similar benefit plans.

( ) True

( ) False

2. Deductions, such as a wage garnishment, are set up similar to any benefit.

( ) True

( ) False

3. For a dental benefit, which of the following benefit elements would you set

up for each provider that you contract with?

( ) Type

( ) Plan

( ) Option

( ) Contribution calculation rate

( ) None of the above


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4. What causes the payroll process to deduct hours from a worker's benefit

accrual plan balance?

( ) The worker submits a request for paid time off to workflow.

( ) The payroll manager selects the Carry forward balances check box on

the benefit accrual plan.

( ) The earning code associated with the plan is included on the worker's

pay statement.

5. The company is offering new dental plan with three options—Subscriber

only, subscriber and spouse, and subscriber and family. How many benefits

must you create so that workers can select the option that they prefer?

( ) One

( ) Two

( ) Three

6. You must set deduction amounts when you create the benefit because you

cannot change the amount when a worker enrolls in the benefit.

( ) True

( ) False

7. For benefit plans that have multiple enrollment options, you must create a

separate benefit for each option.

( ) True

( ) False

8. When multiple benefits are processed for a worker, the lower the deduction

priority for a benefit, the earlier the deduction amount is deducted.

( ) True

( ) False


3 - 45



1. The benefit options element is used to group similar benefit plans.

( ) True

(√) False

2. Deductions, such as a wage garnishment, are set up similar to any benefit.

(√) True

( ) False

3. For a dental benefit, which of the following benefit elements would you set

up for each provider that you contract with?

( ) Type

(√) Plan

( ) Option

( ) Contribution calculation rate

( ) None of the above

4. What causes the payroll process to deduct hours from a worker's benefit

accrual plan balance?

( ) The worker submits a request for paid time off to workflow.

( ) The payroll manager selects the Carry forward balances check box on

the benefit accrual plan.

(√) The earning code associated with the plan is included on the worker's

pay statement.

5. The company is offering new dental plan with three options—Subscriber

only, subscriber and spouse, and subscriber and family. How many benefits

must you create so that workers can select the option that they prefer?

( ) One

( ) Two

(√) Three


3 - 46

6. You must set deduction amounts when you create the benefit because you

cannot change the amount when a worker enrolls in the benefit.

( ) True

(√) False

7. For benefit plans that have multiple enrollment options, you must create a

separate benefit for each option.

(√) True

( ) False

8. When multiple benefits are processed for a worker, the lower the deduction

priority for a benefit, the earlier the deduction amount is deducted.

(√) True

( ) False

4 - 1

MODULE 4: SCHEDULING

Module Overview

To maintain schedules for workers, you must create working time calendars for

each schedule that they work.

The first time, you will create a seven-day pattern of typical working hours called

a working time template. After you create a working time template for each

schedule that hourly workers in your organization typically work, you can use it to

generate a working time calendar of a year or more. When you specify the

working time calendar as the schedule for a position, all workers assigned to the

position use that schedule. The scheduled hours are used to generate the default

earnings statement lines for the worker-position combination.

Schedules that are based on working time calendars are also used with leave

types for paid leave, both for hourly workers and for salaried workers. Later in this

course, you will assign the calendar to a position to identify the position's default

schedule.

Best Practice: The calendars that are used by the Payroll and Production

control modules are created and maintained in the same form. To prevent

confusion it is best to maintain separate calendars for Payroll and for Production

control.

Note: Leave processing is set up and maintained in the Human resource

management module. For more information about leave and leave types, refer to

the Human Resource Management (HRM) for Microsoft Dynamics® AX 2012 R2

course.

Objectives

The objectives are:

Set up weekly schedules of working hours.

Create and maintain a long-term calendar of working hours.


4 - 2

Working Time Templates

Working time templates are week-long schedules of working hours for the

positions that workers have in the organization. The templates are used to create

the working time calendars that are used to generate earnings.

To create working calendars more quickly, you must create a working time

template for each schedule that the hourly workers’ in the organization typically

work.

Working Time Templates Form

Use the Working time templates form to set up templates that define the

regular work times in the legal entity. To open the form, click Payroll > Setup >

Scheduling > Working time templates.

The work times can be a work week that consists of day shifts for the worker,

from 9:00 A.M. to 5:00 P.M. After you define the work times in the templates, you

can use the templates to create and manage work time calendars. The work time

calendars are assigned to positions as a schedule.

The controls in this form are described in the following tables.

Buttons

Button Description

Copy template Copy one template to another template

so that you can reuse the working times.

Copy day Copy one day to another day so that you

can reuse the working times.

Fields

Field Description

Working time template

Enter a unique identifier for the working

time template.

Name Enter a description of the working time

template. This description appears in lists

that are used to select working time

templates.

Module 4: Scheduling

4 - 3

Field Description

Closed for pickup Select so that materials are not picked

for production during the period that is

specified in the From and To fields. This

field is typically used for Production

control scheduling. However, this field

also determines whether you can edit

working hours on the day by default. For

payroll processing, it is common to

select this check box on days where the

place of business is closed.

From Specify the time that the work period

starts on the current weekday.

Note: To create an unpaid break

or lunch period, you can create two

working periods for each day. One

before and one after the unpaid period.

You do not have to create a separate

unpaid time period.

To Specify the time that the work period

ends on the current weekday.

Efficiency Enter a value greater than zero so that

earnings are generated for this work

period.

This field is used for Production control

and it is also used to specify the

efficiency percentage that is used for

scheduling for the selected period. For

payroll processing, the value must be

greater than zero and is typically left as

"100."

Property Assign properties to the selected period.

This field is not used for payroll

processing.

Properties are used to schedule and

structure productions in the Production

control module.

Hours Displays the total working hours set up

for the day.


4 - 4

Demonstration: Create a Working Time Template

This demonstration shows how to create a working time template.

Demonstration Steps

1. Create the working time template record.

a. Click Payroll > Setup > Scheduling > Working time

templates.

b. Click New.

c. In the Working time template field, enter a code to identify the

template. For example, enter "Swing" for a swing schedule

template.

d. In the Name field, enter a description of the template.

2. Set up a schedule for each work day.

a. On the Monday tab, click Add.

b. In the From field, enter the time that the day's work period

starts.

c. In the To field, enter the time that the working period ends.

d. Enter a nonzero value in the Efficiency field.

Note: To specify a period during the day where the worker is not paid, such

as for lunch, enter two lines, skipping the non-paid period.

Repeat steps 2a through 2d for the remaining days of the week by using the

day's tab or copying the schedule to each day.

3. Optionally, copy the schedule to different days.

a. On the Monday tab, click Copy day.

b. On the Copy day dialog box, select the day to copy the schedule

to in the To weekday field.

c. Click OK.

d. Repeat the copy day process for each weekday that you must set

the schedule for.


4 - 5

Working Time Calendars

A working time calendar defines the typical schedule for a position. It identifies

the days and hours that the workers in the position typically work. It can also be

used to specify the earning code that is used for scheduled time as an alternative

to the default earning code that is specified for the position.

Working Time Calendars Form

Use the Working time calendars form to manage the calendars that are

assigned as schedules to positions. To open the form, click Payroll > Setup >

Scheduling > Calendars.

You can choose to manually create a new calendar or copy existing calendars to

create a new calendar.


Buttons

Button Description

Working times Create or update a working time calendar

for the current transaction.

Copy calendar Copy information in the selected calendar

to the new calendar.

Fields

Field Description

Calendar Enter a unique identifier for the calendar.

Name Enter a name for the calendar. The name

is shown in the list when you select a

calendar.

Base calendar Select a base calendar. The selected

calendar inherits settings from this base

calendar. When the base calendar is

updated, the selected calendar inherits

operation times from it.

Standard work day in

hours

Enter the number of working hours in a

standard workday.


4 - 6

Working Times Form

Use the Working times form to enter and maintain the working time periods for

each day on the calendar that you selected on the Working time calendars

form. To open the form, click Payroll > Setup > Scheduling > Calendars >

Working times.


Buttons

Button Description

Compose working times Open the Compose working times

dialog box where you can specify a

working time template. When you close

the form, entries in the working times

calendar will be generated automatically.

Fields

Field Description

Date The dates that earnings statement lines

can be generated for.

Control To edit details in the lower grid for the

selected date, select Open.

This field is not used to determine

whether earnings will be generated for a

specific date. Earnings are generated for

the hours in the lower grid, as long as the

value in the Efficiency in percentage

field on the line is not zero.

Closed for pickup Typically, this field is not used for Payroll.


4 - 7

Field Description

Earning code defined

below

A green icon in this column indicates that

an earning code for this date is already

added to the lower grid.

Typically, earning codes are assigned to

the worker's position assignment. When

earnings are generated, the default

earning code for the position is used.

If an overriding earning code is required

for a day, you can enter it in the calendar.

For example, you can assign a holiday

earning code for the paid holidays that

the company recognizes. The earning

codes that are entered in the lower grid

are used when earnings are generated for

the selected date from a schedule that is

based on this calendar.

Calendar The identifier of the calendar that uses the

working times on this form.

From

The start time for positions that use this

calendar. For example, the start time can

be 07:00:00 if that is the starting time for

a day shift.

To

The end time for positions that use this

calendar. For example, the end time can

be 03:00:00 if that is the ending time for a

day shift.

Efficiency in percentage Any value other than zero or 100 in this

field is disregarded.

If you enter zero in this field, no earning

statement line will be generated for the

specified hours. If you enter 100, the

earnings are generated at the regular rate.

Property Typically, this field is not used for Payroll.

Compose Working Times Dialog Box

Click Compose working times on the Working times form to open the dialog

box. Here, you can define the calendar for which you want to create working

times, the time period that you want to update or change, and the working time

template that you want to use.


4 - 8

Demonstration: Create a Work Calendar Based On a

Working Time Template

This demonstration shows how to create a calendar with working times that are

based on an existing working time template.

Demonstration Steps

1. Create the new calendar record.

a. Click Payroll > Setup > Scheduling > Calendars.

b. Click New.

c. In the Calendar field, enter a code to identify the calendar.

d. In the Name field, enter a description for the calendar.

2. Generate working times for the calendar days.

a. Click Working times.

b. Click Compose working times.

c. On the Compose working times dialog box, enter the range of

dates to create a calendar for in the From date and To date

fields.

d. In the Working time templates field, select the template to

generate the working times from.

e. Click OK.

3. Modify the generated times to match the preferred schedule and the

account for days with non-regular pay.

a. Select the day that you want to modify in the upper grid area of

the Working times form.

b. In the lower grid area, modify the day's working hours or earning

code.

Edit the times in the From and To fields to change the

starting and ending times for the day.

Click Add to insert additional working hours into a day.

In the Earning code field, select an alternative earning

code to use instead of a position's default earning code.

For example, you might have a holiday earning code that

pays double time for holiday pay.

4. Click Close when you are finished modifying the calendar.

Planning the Template For a Schedule

The working time template only accommodates seven days. Therefore, for


4 - 9

schedules where working hours or days differ from week to week, you must plan

the template that fits best. After you generate the calendar from the template,

you will then modify the calendar to fit the schedule. If you plan the calendar,

before the working time template is created, the calendar is made more quickly

and it also helps prevent errors.

Example

For example, workers on a 9/80 schedule work eight nine-hour days and one

eight-hour day over the course of two weeks. The worker then has three days off

every other week, typically receiving alternating Fridays or Mondays off. You

cannot create a working time template to exactly match this schedule. You must

modify the calendar after it is generated. A quick way to make this template is to

create the template with four nine-hour days and one eight-hour day.

FIGURE 4.1: WORKING TIME TEMPLATE FOR A 9/80 SCHEDULE

After you create the working time template, you will generate a calendar based

on the template. After the calendar is generated, you must remove the hours for

every other eight-hour day in the week.

FIGURE 4.2:TWO-WEEK SCHEDULE BASED ON THE 9/80 TEMPLATE

Or, you can choose to create a template without the one eight-hour day each

week and modify the calendar to add those additional hours to one day every

other week.


4 - 10

Lab: Create a Calendar

Scenario

Mia, the Payroll Administrator at Contoso Entertainment System USA, is notified

that several positions in the Administration Department will change to a new

schedule. The positions will start to work a 4/10 schedule on June 1, 2013. Mia

must create a new calendar to use for the schedule for those positions.

First, Mia must create a working time template to set a 10-hour work day, for

Monday through Thursday. The working times are from 6:30 A.M. to 5:30 P.M.

with an hour for lunch from 11:30 A.M. to 12:30 P.M.

She will then create the working calendar for one year. Additionally, she must

update the work days that fall on holidays to use eight hours and the holiday

earning code. Because all workers with positions in the Administration

Department are salaried, the earnings generation process will automatically add

another two hours of regular earnings to the worker's earnings statement for the

pay period that includes a holiday.

Lab Setup

Name the working time template "4/10 M-Th".

Name the calendar "Admin".

Contoso will observe the following holidays in the calendar year beginning

6/1/2013.

July 4 – Independence Day

September 2 – Labor Day

November 11 – Veterans Day

November 28 – Thanksgiving Day

December 25 – Christmas Day

January 1, 2014 – New Year's Day

May 26, 2014 – Memorial Day

Task 1: Create the Working Time Template

High Level Steps

1. Create the "4/10 M-Th" working time template.

2. Set up the working times for each day.


4 - 11

Detailed Steps

1. Create the "4/10 M-Th" working time template.

a. Click Payroll > Setup > Scheduling > Working time

templates.

b. Click New.

c. In the Working time template field, enter "4/10 M-Th".

d. In the Name field, enter "4/10 M-Th".

2. Set up the working times for each day.

a. On the Monday tab, click Add.

b. In the From field, enter "6:30 A.M."

c. In the To field, enter "11:30 A.M."

d. Click Add.

e. In the From field, enter "12:30 P.M."

f. In the To field, enter "5:30 P.M."

g. Click Copy day.

h. In the To weekday field, select Tuesday.

i. Click OK.

j. Click Copy day.

k. In the To weekday field, select Wednesday.

l. Click OK.

m. Click Copy day.

n. In the To weekday field, select Thursday.

o. Click OK.

p. Click Close.

Task 2: Generate and Update the Calendar

High Level Steps

1. Create the working time calendar record.

2. Generate the calendar days from the working time template.

3. Modify the working hours and earning code for each Contoso

holiday.

Detailed Steps

1. Create the working time calendar record.

a. Click Payroll > Setup > Scheduling > Calendars.

b. Click New.

c. In the Calendar field, enter "Admin".

d. In the Name field, enter "Admin Calendar".


4 - 12

2. Generate the calendar days from the working time template.

a. Click Working times.

b. Click Compose working times.

c. On the Compose working times dialog box, enter "6/1/2013" in

the From date field and "5/31/2014" in the To date field.

d. In the Working time template field, select the 4/10 M-Th

template from which to generate the working times.

e. Click OK.

3. Modify the working hours and earning code for each Contoso

holiday.

a. Select the 7/4/2013 day in the upper grid area of the Working

times form.

b. In the lower grid area, modify the day's working hours and the

earning code.

i. Edit the 6:30 A.M. time in the From field and change it to

8:30 A.M. to set the day to eight working hours.

ii. In the Earning code field, select the Holiday earning

code to use instead of a position's default earning code

for both time slots.

c. Repeat steps a and b for each Contoso holiday.

d. Click Close when you are finished modifying the calendar.


4 - 13

Module Review

Working time templates and working time calendars are used to define the

schedules and the working hours for the positions in an organization. Planning

the templates and calendars that an organization requires helps make

maintaining the schedules easier because there will be fewer manual entries and

fewer errors.

This module also described how to perform the following activities:

Create a week-long working time template.

Create a calendar and generate working days based on a template.

Maintain a calendar to accommodate holidays, weekends, and other

non-regular earning periods.

Test Your Knowledge


1. Which of the following is an acceptable method for creating a working time

calendar?

( ) Import a calendar from Microsoft Outlook®.

( ) Generate working hours for each day in a calendar from a template.

( ) Copy an existing calendar.

( ) A and B

( ) B and C

2. On a working time template, you can copy one day's working hours to

another day.

( ) True

( ) False

3. You can specify an earning code for a position on a working time template

before you create the calendar.

( ) True

( ) False


4 - 14

Sequencing Activity

Put the following steps in order by numbering each to indicate the correct order.

Steps

Create a working time template of one week's working hours.

Modify working hours and earning codes for weekends, holidays,

and other non-regular earning periods.

Create a calendar record.

On a calendar, generate working times for each day based on a

template.

4. The earning code that you assign to a working time period overrides the

position's default earning code for that time period.

( ) True

( ) False

5. When you use the Compose working times dialog box to generate working

times for a calendar, you must create at least one whole year.

( ) True

( ) False


4 - 15



1. Which of the following is an acceptable method for creating a working time

calendar?

( ) Import a calendar from Microsoft Outlook®.

( ) Generate working hours for each day in a calendar from a template.

( ) Copy an existing calendar.

( ) A and B

(√) B and C

2. On a working time template, you can copy one day's working hours to

another day.

(√) True

( ) False

3. You can specify an earning code for a position on a working time template

before you create the calendar.

( ) True

(√) False

Sequencing Activity

Steps

1 Create a working time template of one week's working hours.

4 Modify working hours and earning codes for weekends, holidays,

and other non-regular earning periods.

2 Create a calendar record.

3 On a calendar, generate working times for each day based on a

template.


4 - 16

4. The earning code that you assign to a working time period overrides the

position's default earning code for that time period.

(√) True

( ) False

5. When you use the Compose working times dialog box to generate working

times for a calendar, you must create at least one whole year.

( ) True

(√) False

5 - 1

MODULE 5: POSITION SETUP

Module Overview

A worker’s earnings are derived from the worker’s position and, or positions. The

information for the default earning code, schedule, and pay cycle for a position is

set up on the Position form, in the Payroll FastTab. You must set up this payroll

information for each position in the organization. The worker's position also

determines the default financial dimensions to use to show the expenses for the

organization in the general ledger.

This module discusses only the payroll-specific information for a position.

For more information about how to set up additional elements of a position that

includes hiring and transferring workers who are assigned to a position, refer to

the Human Resource Management in Microsoft Dynamics® AX 2012 course.

Objectives

The objectives are:

Review the earnings-related fields on the Positions form.

Assign and maintain the default payment, scheduling, and

accounting information for a position.


5 - 2

Payroll Setup For a Position

For each position in the organization, you must set up the controls and values

that establish the default settings and baselines for the earnings that will be

generated for the workers that are assigned to the position. To set these values,

you will use the Payroll FastTab on the Position form.

You must also define the default financial dimensions that are used to show the

wage expenses in the general ledger. To set these values, you will use the

Financial dimensions FastTab on the Position form.

Payroll FastTab

Use the Payroll FastTab on the Position form to set payroll information for a

position. To open the Positions list page, click Payroll > Common > Positions >

Positions. Double-click a position to view it in the Position form.

The field names for this form are described in the following table.

Field Description

Pay cycle Select the pay cycle that determines the

payroll calculation frequency and the

payment date for the position generated.

Paid by Select the legal entity that is responsible

for paying for the position. You cannot

select multiple responsible legal entities

for one position.

Pay period overtime hours Enter the number of hours for each pay

period that is expected for the position.

This field is for information only.

Annual regular hours Enter the number of regular working

hours for each year that is expected for

the position.

This number is used to determine salary

adjustments. For example, you might

enter 2080 for a full-time salaried

worker. This equals 40 hours each week.

If a worker has eight hours of sick time in

a one week pay period, the system can

automatically “make up” the difference

of 32 hours.

Insurance benefit If offered, enter a general liability

insurance benefit for the position.

Module 5: Position Setup

5 - 3

Field Description

Organizational officer Select this check box if a company officer

holds the position.

Generate salary Select this check box to generate

earnings for the position based on the

position's Default earning code, and

the worker's fixed compensation plan.

When this check box is selected, a single

earnings statement line is created for the

pay period.

Generate earnings from

schedule

Select this check box to generate

earnings for the position based on the

calendar that is selected in the Schedule

field, the Default earning code, and the

worker's fixed compensation plan.

When this check box is selected, a day-

by-day distribution of earnings is created

for the position in the worker’s earnings

statement. When this check box is

cleared, no earnings statement lines will

be created based on the schedule for the

worker.

Default earning code The earning code to use for generating

regular earnings for the position.

Schedule The calendar representing the days and

times that are typically worked by the

position. Only calendars that are defined

for the legal entity that is selected in the

Paid by field are displayed.

This field determines the time periods

that earnings are generated for when the

Generate earnings from schedule

check box is selected. The selected

calendar also identifies the working days

when it generates earnings for any leave

the worker uses.

Workers compensation Enter the compensation benefit and

state where the position is eligible for

workers compensation.


5 - 4

Maintaining Date-Effective Payroll Changes for a Position

You can create date-effective changes for most of the information that is set up

for positions by using the Maintain position versions form. This includes the

earnings-related information that you set up on the Payroll FastTab. If there is an

upcoming change for the position that you are currently viewing, a yellow menu

bar across the top of the form notifies you about the change. To create new

versions or review previous and upcoming changes to the position, click

Maintain versions in the Versions group on the Action Pane

Earnings Fields

The Earnings fields on the Payroll FastTab provide many options to control how

earnings are generated.

If Generate salary or Generate earnings from schedule is not

selected, then the base earnings statement lines for the position are

not generated. Only the recurring earnings that are specified as

payroll earning codes on the Worker form are generated.

If Generate earnings from schedule is selected and Generate

salary is not selected, consider the following:

o A Schedule is required. You can select from any calendars that

are composed for the legal entity that is selected in the Paid by

field.

o A Default earning code is required.

o A day-by-day allocation of earnings for the position is shown in

the worker’s earnings statement.

Typically, you will use this set of selections for hourly workers who work a

schedule that does not change from one pay period to the next.

If Generate salary is selected and Generate earnings from

schedule is not selected, consider the following:


o The worker is paid the uniform position salary amount for each

pay period, and a single line is included in the earnings

statement. The line will have the date of the last day in the pay

period.

o If the earnings statement lines are entered manually before the

earnings are generated, the salary could be allocated across

more than one line. The total of the manually entered lines and

the single generated line is always the uniform salary amount.

o A Schedule is still required if an organization tracks employee

leave as a separate earnings statement line.


5 - 5

Typically, you will use this set of selections for salaried workers.

If both Generate salary and Generate earnings from schedule are

selected, consider the following:

o A Schedule is required. You can select from any calendars that

are created for the legal entity that is selected in the Paid by

field.


o The worker is paid the uniform position salary amount for each

pay period.

o A day-by-day allocation of earnings for the position is shown in

the worker’s earnings statement.

You can use this set of selections for salaried workers when you want a day-by-

day allocation of their time. For example, if the worker’s time is associated with a

project two days out of five days.

Note: When a worker uses a paid leave, you must assign a schedule to the

worker’s position to include the leave on generated earnings. This is required, even

if you generate earnings by salary for that position, and not from a schedule.

If an earning code is assigned to the leave type in the leave record, earnings lines

that are generated for the position during the leave will show a daily allocation. If

no earning code is assigned to the leave type, the leave represents unpaid leave. No

earnings lines will be generated during the leave period. Additionally, the salary

amount will be adjusted, although you can manually modify the earnings

statement to add earnings statement lines.

Financial Dimensions FastTab

Worker payments are an expense that must be included in the general ledger.

Typically, organizations show these expenses in specific ledger accounts.

Frequently these accounts are based on department, business unit, group, or

some other internal category. To account the payments for a position, you must

identify parts of the ledger account to use in the payroll transactions that are

created for the position. You do this by selecting default dimension values in the

Default financial dimensions fields on this FastTab. You can also choose to

distribute the amounts in several accounts by specifying a distribution template.

The default financial dimensions and distribution template that you specify on

the position determine the dimension values that are used in payroll transactions.

The dimension values that are available in the Default financial dimensions

fields are determined by the company that is selected in the Legal entities field.


5 - 6

When worker earnings are generated, the ledger account that the payments will

post to are created by combining information from the following locations:

Default financial dimension values that are entered on the Position

form, in the Financial dimensions FastTab.

Main account that is entered for the position's default earning code

on the Earning codes form, in the Accounting FastTab.

Financial dimension values that are set up in the accounting

distribution template that is selected in the Position form, in the

Financial dimensions FastTab, in the Distribution template field.

Distributing Earnings In Multiple Accounts

You can select an accounting distribution in the Distribution template field to

distribute worker payment amounts in multiple accounts before they are posted

to the general ledger. The template contains percentages and the dimension

values that the payments will be distributed to. Accounting distributions are

created by using the Financial dimension default template form in the General

ledger module.

The earnings are distributed in these ledger accounts based on the template's

percentages.

Note: Accounting distributions and amounts appear on earnings statements.

However, the payment amounts are not posted to the general ledger until they

appear on a pay statement that is created from an earnings statement.

Demonstration: Setting Up a Position For Payroll

Processing

This demonstration shows how to set up an existing position so that it is

processed when earnings are generated for a worker that holds the position.

Demonstration Steps

1. Browse to a position.

a. Click Payroll > Common > Positions > Positions.

b. Select a position to edit in the list page.

c. Click Edit in the Maintain group on the Action Pane.

d. On the Position form, expand the Payroll FastTab.


5 - 7

2. Enter or update the position's payroll information.

a. In the Pay cycle field, select the frequency at which the position

is paid.

b. In the Paid by field, select the legal entity responsible for paying

for the position.

c. If the company can expect that the worker assigned to the

position will work a certain number of overtime hours each pay

period, enter the number of hours in the Pay period overtime

hours field.

d. In the Annual regular hours field, enter the number of hours for

each year that the company can expect from the position.

Typically, 2080 hours is standard.

e. If the position is offered a general liability insurance benefit,

select it in the Insurance benefit field.

f. If the position is held by a company officer, select the

Organizational officer check box. Certain states require this

information for tax purposes.

g. In the Earnings fields, indicate how the earnings are generated

for the position.

To generate the earning's from the worker's salary, select

the Generate salary check box.

To generate separate earnings lines for each day on the

worker's earning statement, select the Generate

earnings from schedule check box and select the

calendar to use for the position's schedule in the

Schedule field. Typically, schedules are used to generate

earnings for hourly workers.

Select the earning code to use for the position's regular

earnings in the Default earning code field.

3. If the position is in a state where a worker is eligible for workers'

compensation, add the state to the grid in the Workers'

compensation area.

4. Identify the default dimension values to use when generating

earnings for the position.

a. Expand the Financial dimensions FastTab.

b. In the Legal entities field, select the company that is responsible

for the position. This field determines the values that are

available in the Default financial dimensions fields.

c. In the Distribution template field, select the accounting

distribution template to use for the position's payroll

transactions.

d. In the Default financial dimensions fields, select the dimension

values to use for payroll transactions.


5 - 8

Lab: Set Up Payroll Information For a Position

Scenario

Contoso Entertainment System USA recently hired Claus Juhl as a Project

Manager. Mia, the Payroll Administrator, must set up the position (000425) for

payroll processing. This is a salaried position that is included in a semimonthly

pay cycle. To account for the wages that are paid for the position in the general

ledger, Mia must also enter the default financial dimension values and the

distribution template for the position.

Additionally, Mia is notified that Bill Malone's current position is becoming an

hourly position and that Bill's earnings will be paid based on the hours he records

by using the company's time-keeping system. Mia must change Bill's Machine

Operator position (000068) so that earnings are no longer generated by a

schedule. The rest of his position details remain the same. She must also

backdate the changes to the beginning to January 1, 2013.

Lab Setup

The legal entity code for Contoso Entertainment System USA is

USMF.

The number of annual regular hours for the position is 2080.

The position uses the Regular earning code as the default earning

code.

Salaried employees at Contoso Entertainment System USA are

assigned the Payroll schedule.

All positions that are paid by Contoso Entertainment System USA use

the Payroll distribution template.

Project manager positions use the following default financial

dimension values:

o CostCenter: 009 (Service Operations)

o Department: 023 (Operations)

Task 1: Enter Beginning Payroll Information for a Position

High Level Steps

1. Open Claus' position.

2. Set up the payroll details for the position.

3. Set up the default financial dimension values to use for payroll

transactions that involve the position.


5 - 9

Detailed Steps

1. Open Claus' position.


b. On the Positions list page, select position 000425.


d. On the Position form, expand the Payroll FastTab.

2. Set up the payroll details for the position.

a. In the Pay cycle field, select the biweekly pay cycle.

b. In the Paid by field, select USMF (Contoso Entertainment

System USA).

c. In the Annual regular hours field, enter "2080".

d. Select the Generate salary check box.

e. In the Default earning code field, select Regular.

f. In the Schedule field, select Payroll.

3. Set up the default financial dimension values to use for payroll

transactions that involve the position.

a. Expand the Financial dimensions FastTab.

b. In the Legal entities field, select USMF.

c. In the Distribution template field, select Payroll.

d. In the CostCenter field, select 009 (Service Operations).

e. In the Department field, select 023 (Operations).

f. Click Close.

Task 2: Update a Position's Earnings Information

High Level Steps

1. Open the Maintain versions form for the position.

2. Update the position's payroll information for the beginning of the

2013 calendar year.

Detailed Steps

1. Open the Maintain versions form for the position.


b. On the Positions list page, select position 000068.


d. On the Position form, click Maintain versions in the Versions

group on the Action Pane.


5 - 10

2. Update the position's payroll information for the beginning of the

2013 calendar year.

a. On the Maintain position versions form, select the Payroll tab.

b. Click Add.

c. In the Effective field, enter "1/1/2013".

d. In the Pay cycle field, select the weekly pay cycle.

e. In the Paid by field, select USMF (Contoso Entertainment

System USA).

f. In the Annual regular hours field, enter "2080".

g. Make sure that the Generate salary and Generate earnings

from schedule check boxes are cleared.

h. In the Earning code field, select Regular.

i. In the Schedule field, select Payroll.

j. Click Close.

k. Click Yes.


5 - 11

Module Review

This module showed how to use the Payroll and Financial dimensions FastTabs

that are on the Position form. These settings are used to set the default earning

code, schedule, pay cycle, and accounting values for a position.

Test Your Knowledge


1. Multiple legal entities can pay for the same position.

( ) True

( ) False

2. If the earnings information on a position is set to both generate by the

worker's salary and by a schedule, the earnings statement only includes a

single line for the earnings in a pay period.

( ) True

( ) False

3. To generate day-by-day earning lines, the Payroll FastTab would require

which following combination of entries in the Earnings fields?

( ) A calendar is entered in the Schedule field and the Generate salary

check box is selected.

( ) Neither the Generate salary nor the Generate earnings from the

schedule check box is selected. To generate day-by-day earnings,

you must manually enter the earning lines for a worker.

( ) The Generate earnings from the schedule check box is selected, a

default earning code is entered, and a calendar is selected in the

Schedule field.

( ) None of the above.

4. In the Earnings fields for a position, you can select both the Generate salary

and Generate earnings from schedule check boxes to generate earning

lines for each day that is worked by a salaried worker.

( ) True

( ) False


5 - 12



1. Multiple legal entities can pay for the same position.

( ) True

(√) False

2. If the earnings information on a position is set to both generate by the

worker's salary and by a schedule, the earnings statement only includes a

single line for the earnings in a pay period.

( ) True

(√) False

3. To generate day-by-day earning lines, the Payroll FastTab would require

which following combination of entries in the Earnings fields?

( ) A calendar is entered in the Schedule field and the Generate salary

check box is selected.

( ) Neither the Generate salary nor the Generate earnings from the

schedule check box is selected. To generate day-by-day earnings,

you must manually enter the earning lines for a worker.

(√) The Generate earnings from the schedule check box is selected, a

default earning code is entered, and a calendar is selected in the

Schedule field.

( ) None of the above.

4. In the Earnings fields for a position, you can select both the Generate salary

and Generate earnings from schedule check boxes to generate earning

lines for each day that is worked by a salaried worker.

(√) True

( ) False

6 - 1

MODULE 6: WORKER SETUP

Module Overview

You must complete several items before workers can be paid. These items

include the following:

Enroll your employees in a fixed compensation plan for easy

compensation maintenance. Fixed compensation plans are set up in

the Human resources module. For more information, refer to the

Human Resource Management in Microsoft Dynamics® AX 2012 R2

course.

Set up a pay cycle, schedule, and default earning information for the

positions that workers are assigned to. The position establishes many

of the default settings for each worker.

Additionally, certain information about the worker’s position

assignment, taxes, and benefits must be set up before you generate

a pay statement for the worker.

This module reviews these tasks.

Objectives

The objectives are:

Set up additional and custom earning codes for the worker.

Set up worker tax information.

Enroll the worker in benefits and benefit accrual plans.

Maintain worker benefits and benefit accrual plans.

Assign garnishments and tax levies to the worker.

Set up worker bank account information.


6 - 2

Earning Codes

If the worker requires an earning rate that differs from the worker’s position's default

earning code, you will have to assign an earning code to the worker to make sure that

earnings are generated correctly. You can also add more earning codes to the worker

for recurring earnings, such as car allowances and regular bonuses.

Note: Typically, the position's default earning code does not define the

worker's salary or hourly rate. Those rates are set up on the worker's fixed

compensation plan. Compensation plans are assigned to the worker by using the

Employee fixed compensation form. On the Workers list page, click Fixed plan

in the Employee compensation group on the Compensation tab of the Action

Pane. Compensation plans are discussed in more detail in the Human Resource

Management in Microsoft Dynamics® AX 2012 R2 course.

Earning Codes For Worker Position Assignments

Worker-specific earning codes are assigned to the worker-position assignment

on the Worker form, on the Profile page, in the Payroll earning codes FastTab.

Note: The earning codes that you add here are used to override the position's

default earning code or to add more recurring earnings for the worker. For

recurring earnings, you must specify the earnings amount on this FastTab.

For each earning code that you add, you must select one of the worker's

positions that the code applies to. If it is necessary, you can change the amount

that defaults from the earning code. This value should be appropriate for the rate

basis that is displayed. For example, you might enter "500" for a car allowance.

However, if you are entering overtime hours, "10" might be appropriate and this

field would act as a multiplier. The Rate basis is assigned in the Earning codes

form and it determines whether the Amount field acts as a multiplier or a flat

amount.

Additionally, for each code, you must define how frequently the earning is

received in the Frequency field. If you are configuring an earning code that is

based on hours or pieces, the Frequency field is not available. Hour-based

earnings are generated based on the Generate salary and Generate earnings

from schedule fields in the Positions form. Piece-work earnings are entered

manually.

Module 6: Worker Setup

6 - 3

Demonstration: Adding a Recurring Earning To the Worker

This demonstration shows how to add a new recurring earning code to the

worker-position assignment and how to modify the earning amount, if it is

necessary.

Demonstration Steps

1. Add the earning code to the worker-position assignment.

a. Click Payroll > Common > Workers > Workers.

b. Double-click the worker to update.

c. On the Worker form, in the Profile page, expand the Payroll

earning codes FastTab.

d. Click Add.

e. In the Position field, select the position that the earning applies

to.

f. In the Earning code field, select the earning code. For example,

select a parking allowance earning code.

g. If the earning is a flat amount that differs from the default for the

earning code, enter the new amount in the Amount field. If the

earning is for a non-flat rate, enter a new multiplier to use when

you calculate earnings.

h. Optionally, select how frequently the earning is calculated for the

worker in the Frequency field.

To automatically include the earning in an earnings statement,

you must select a frequency. If no frequency is selected, the

earning code that you specify serves as a rate definition for when

the earning code is entered on an earnings statement line for the

worker.

Taxes

To make sure that taxes for the worker are calculated at the correct rate when

earnings are generated, you must identify where each worker resides and where

they work. This information is combined with the tax code information that you

set up earlier to calculate the tax withholding amounts on each pay statement.

Worker Tax Regions

Important information that you must know for each worker that you are setting

up tax regions for, includes the following:

The city and state where the worker claims residency.

The city and state of each location where the worker could work.


6 - 4

Additionally, for some states, you must have the school district and the

municipality that is associated with the residence or work locations. You can

contact the state tax office to determine whether you need this information.

The first tax region that is assigned to the worker will be designated as the

worker’s resident tax region. You can change the worker’s residency later. In most

cases, the worker tax codes needed for this tax region are automatically assigned

to the worker when you close this form. If the worker is not assigned a position,

or if the worker’s position is not assigned a legal entity for payroll, the tax codes

will be assigned later, when the position and legal entity are assigned.

Demonstration: Setting Up the Worker Tax Region

This demonstration shows how to associate the worker with a tax region.

Demonstration Steps

1. Identify the tax region for the worker.


b. Select the worker in the list page to update.

c. Click Worker tax regions in the Payroll tab of the Action Pane.

d. Click New.

e. In the Tax region field, select the tax region where the worker

claims residency, or the tax region where the worker can work.

f. If this is required by the state, select the School district and

Municipality where the tax region is located.

g. Repeat steps d through f to assign additional tax regions to the

worker.

h. Click Close.

You will receive a message that displays the tax codes that are added to the

worker record.

Worker Residency

The first tax region that is assigned to the worker is designated as the worker’s

resident tax region. The worker can have only one resident tax region at a time.

If you know that the worker’s resident tax region will change in the future, you

can set up a new resident tax region to become effective on a specified date. The

current resident tax region will automatically expire when the new one takes

effect. You do not have to set an expiration date for the current resident tax

region. When you set up a new resident tax region with a new effective date, the

system adjusts the expiration date for the previous resident tax region.


6 - 5

Demonstration: Change the Worker’s Residency

This demonstration shows how to update the worker's residency.

Demonstration Steps

1. Select the worker and open the Maintain residency form.


b. Select Jimmy Bischoff in the list page.

c. Click Worker tax regions in the Payroll tab of the Action Pane.

d. On the Worker tax regions form, click Maintain residency.

2. Specify the tax region for the worker.

a. Click Add.

b. In the Tax region field, select the tax region where the worker

claims residency.

c. In the Effective field, select the date when the residency

becomes effective.

d. Click Close.

e. If you receive a message that states that effective dates for one

or more records will be adjusted by the change, click Yes.

f. Verify that the Resident check box for the correct tax region is

selected

g. Click Close.

Default Tax Regions

A default tax region is required for each position that the worker is employed in.

The default tax region is used for all earnings that are generated for that position,

unless you change the tax region on the earning statement line. When the

position is assigned to a different worker, a default tax region must be assigned

for the new worker. A position can be assigned to only one default tax region.

Click Default tax region in the Payroll tab on the Action Pane of the Workers

list page to open the Default tax region form.

To assign a default tax region to a position, click New. For each worker position,

select the default tax region in the Tax region column. You can select from the

tax regions that are associated with the worker in the Worker tax regions form.

If you want to change the default tax region for a position that already has a

default tax region, select the position, and then click Delete.


6 - 6

Worker Tax Codes

The worker’s tax options, such as filing status or total allowances, are managed

on the Worker tax codes form. The left-side of the form lists the tax codes that

are associated with the worker, when the worker tax region is set up. You must

set up the parameters for each tax code. For example, you must enter the

worker's exempt and filing status for the federal income tax. You must set up the

parameters for each legal entity in which the worker is employed.

Before you set up tax information for the worker, you must know the values of

the tax options for all the tax codes that are assigned to the worker. These are

different for each tax code. Typically, the information is collected on Form W-4 or

a similar form for the state.

When the Worker tax codes form opens, the worker-specific parameters for the

selected tax code that are effective on the current date are shown. To view the

tax codes and the tax code parameters that are or will be effective on a particular

date, click the button next to Current records, enter a date, and then click Apply.

The Legal entity field determines the tax code parameters that are displayed.

Demonstration: Maintain Worker Tax Information

This demonstration shows how to update the worker's tax information.

You must have the values of the tax options for all the tax codes that are

assigned to the worker. Typically, these values are collected on Form W-4 or a

similar form for the state.

Demonstration Steps

1. Select the worker and the tax code to maintain.


b. Select Jimmy Bischoff in the list page.

c. Click Worker tax codes in the Payroll tab of the Action Pane.

d. In the Legal entity field, select USMF.

e. In the Tax code column, select a tax code.

Note: If there are no tax codes available, the worker tax region is not set up

for the worker. Use the Worker tax region form to add the applicable tax codes for

the worker positions.

2. For a selected tax code, update the worker information.


b. On the Worker tax code parameter date manager form, select

the parameter to change in the Tax code parameter column.

c. Click Add.


6 - 7

d. In the Effective field, enter the date when the new parameter

value will become effective.

e. In the Value field, select the new parameter value.

f. Repeat steps 2c through 2e to change additional parameter

values.

g. Click Close.

Repeat these steps to configure additional tax codes. If the worker has positions

with more than one legal entity, make sure that you configure the worker tax

codes for all applicable legal entities.

Benefits

Before you set up the worker's payroll information for a benefit, you must enroll

the worker in the benefit. You can enroll workers individually or as a group in a

mass enrollment.

Enroll the Worker in a Benefit

You can enroll and remove workers from benefit plans and specify the dates that

the worker is eligible for benefits. You can also maintain dependent coverage and

beneficiary designations for benefits that the worker is enrolled in.

You can use the Maintain benefits form to enroll the worker in a benefit. The

form is opened by clicking the Benefits link in the Personal information FastTab

on the Worker form. Or, you can select the worker on the Workers list page and

then click Personal information > Benefits from the Related information

group on the Action Pane.

Maintain Benefits Form

The Maintain benefits form displays the benefits that the worker is currently

enrolled in.

For benefits that affect payroll, you can expand the Payroll details FastTab. The

fields on this FastTab will vary, depending on how the Payroll impact field in the

Benefit elements form is set for the selected benefit plan.

The fields on this form are described in the following table.

Field Description

Paid by The legal entity that pays for the selected

benefit for this worker. Usually, this is the same

legal entity that the worker is employed by and

that pays for the worker position.


6 - 8

Field Description

Position Leave this field blank, except when the total

costs for the benefit must follow a specific

position. Union dues are one example of a

benefit that would be assigned to a position.

If you select a position, the benefit calculations

are based only on the earnings from the

position. If you do not select a position, the

deductions and contributions for the benefit

are calculated based on all the worker’s

earnings. The amounts are divided between all

the positions that the employee is currently

assigned to. The distribution for the deductions

and calculations uses the same distribution as

the earnings for those positions

Calculation priority The order that deductions and contributions

for the selected benefit are calculated in,

compared to other benefits.

The deductions and contributions for the

benefit with the lowest calculation priority

number are calculated first, starting with zero.

When multiple benefits have the same number,

the calculations for those benefits are

completed in alphabetical order.

The calculation order is important when the

result of the calculation for one benefit is used

in the calculation for another benefit, especially

for garnishments and tax levies. Contact legal

advisors to help you determine the correct

calculation priority for all benefits.

Deduction priority The order that deductions for the selected

benefit are made in, compared to other

deductions.

The deduction for the benefit with the lowest

deduction priority number is made first,

starting with one. When multiple benefits have

the same number, the deductions for those

benefits are made in alphabetical order.

Contact legal advisors to help you determine

the correct deduction priority for all benefits.

The default value for this field is set in the

Benefit elements form.


6 - 9

Field Description

Basis and Deduction The basis option and the deduction amount

are used together to calculate the payroll

deduction amount for the benefit.


category is Tax Levy.

Basis and Contribution The basis option and the contribution amount

are used together to calculate the employer

contribution amount for the benefit.

Best Practice: If you change the default

values for any payroll fields in this form, it is a

best practice to enter an explanation in this

field.

Expand the Payroll limits FastTab. This FastTab can contain a set of payroll limits

for contributions, deductions and, or for both, depending on the value in the

Payroll impact field in the Benefit elements form.

You can enter the following information for deductions.

Field Description

Limit amount The maximum amount that can be deducted

from the worker’s pay for the selected benefit.

If there is no maximum amount, leave this field

blank.

The amount that can be deducted for the

benefit in future pay periods before the end of

the limit period is reached is shown in the

Remaining field. The amount is automatically

updated during each pay run. The field can

also be changed manually.

Limit period The period that the deduction limits apply to.

For example, if the Limit amount is 1200.00

United States dollars (USD) and the Limit

period is Year, when the cumulative

deductions for the benefit reach 1200.00 USD,

there will be no additional deductions for that

benefit for the rest of the year.

The last day of the current limit period is

shown in the Limit end field. When the current

limit period ends, this field automatically resets

to the end of the new limit period.


6 - 10

You can enter the following information for contributions.

Field Description

Limit amount The maximum amount that can be

contributed by the employer for the

selected benefit. If there is no

maximum amount, leave this field

blank.

The amount that can be contributed

for the benefit in future pay periods

before the end of the limit period is

reached is shown in the Remaining

field. The amount is automatically

updated during each pay run. The field

can also be changed manually.

Limit period The period that the contribution limits

apply to. For example, if the Limit

amount is 1200.00 USD and the Limit

period is Year, when the cumulative

contributions for the benefit reach

1200.00 USD, there will be no

additional contributions for that

benefit for the rest of the year.

The limit period is calendar-based. The

last day of the current limit period is

shown in the Limit end field. When

the current limit period ends, this field

automatically resets to the end of the

new limit period.

Demonstration: Enroll Multiple Workers in a Benefit at the

Same Time

In addition to enrolling individual workers in benefits, you can also enroll multiple

workers in a benefit plan at the same time. This demonstration shows how to use

the Mass benefit enrollment form to enroll multiple workers in the same option

for a benefit plan.

Note: If the benefit that you are enrolling the workers in is set up to consider

the worker's benefit eligibility, only the workers that meet the eligibility criteria will

be enrolled in the mass enrollment process.


6 - 11

The mass enrollment process enrolls workers in the benefit by using the benefit's

default settings. However, frequently you must still enter worker-specific settings

individually for each worker benefit.

Demonstration Steps

1. Identify the workers to enroll in the benefit.


b. On the Workers list page, select the check box next to each

worker to enroll in the benefit.

c. Click Mass benefit enrollment in the Personnel actions group

of the Action Pane.

2. Select the benefit plan and option for the workers.

a. On the Mass benefit enrollment form, select the benefit in the

Benefit field. You can select from all options for each benefit

plan.

b. In the Coverage start date field, enter when the enrollment

begins.

c. In the Coverage end date field, enter when the enrollment

expires.

d. Optionally, click Add to include additional workers in the

enrollment.

e. When you have selected all the workers to include, click Enroll.

Demonstration: Update the Worker Benefit

This demonstration shows how to make a future change to an existing benefit for

the worker, April Stewart.

Note: If you make a benefit change in the middle of a pay period the changes

will not be effective until the next pay period.

Demonstration Steps

1. Open the Maintain benefits form for April's worker record.


b. On the Workers list page, double-click April's worker record.

c. On the Worker form, in the Profile page, expand the Personal

information FastTab.

d. Click the Benefits link.


6 - 12

2. Modify the payroll details for a benefit.

a. Select a benefit to modify from the list of benefits on the left

side. For example, select the 401(k) retirement plan.

b. Click Maintain versions.

c. On the Payroll details tab of the Maintain versions form, click

Add.

d. In the Effective field, select the date that the change will become

effective.

e. Modify the benefit. For example, April might have elected to

change her deduction for the retirement plan. Therefore, you can

enter the new deduction rate in the Deduction field.

f. Enter a comment or reason for the change in the Notes field.

3. Click Close.

Change Benefits After the Worker has a Qualifying Event

If the organization uses eligibility rules to determine when workers can enroll in

or modify their benefit elections, you can create eligibility events to identify the

event that occurred and the associated changes that you are making to the

worker or workers.

Benefit eligibility policies and rules are set up in the Human resources module.

For more information, refer to the Human Resource Management in Microsoft

Dynamics AX 2012 R2 course.

You must create a new eligibility event for each qualifying event. You can create

the events from the Workers list page or the Worker form. Click Create

eligibility event on the Personnel actions group of the Action Pane. After you

define the event, you can enter the benefit changes, effective dates, and the

workers that are affected. Typically, eligibility events and their associated benefit

changes are maintained in the Human resources module. You can update and

process events on the Eligibility events list page and the Eligibility event details

form.

Garnishments and Tax Levies

Wage garnishments and tax levies are handled in the same manner as employee

benefits. The garnishment or levy is entered on the worker record by using the

Maintain benefits form. Similar to other benefits, you must enter payroll

information for each garnishment or levy that is entered for the worker. This

information includes the date the garnishment becomes effective and the

calculation priority, deduction priority, amount, and limit.


6 - 13

If the organization charges an administrative fee for processing the garnishment,

you can also add a fee benefit to the worker to deduct the fee amount from the

worker's wages. You must also specify the fee on the garnishment benefit so that

the fee is both deducted and considered when you calculate any deduction limits.

Demonstration: Enter the Garnishment for the Worker

This demonstration shows how to enter the garnishment for the worker. In this

example, you will set up a family support order garnishment.

Before you can perform this demonstration, the garnishment benefit must exist.

Demonstration Steps

1. Select the worker and add the garnishment benefit.


b. Select the worker on the list page.

c. Click Personal information > Benefits from the Related

information group on the Action Pane.

d. Click Add.

e. In the Benefit field, select the FamSO benefit.

Note: Typically, garnishments are set up to bypass eligibility rules. Therefore,

you can select Eligibility bypassed to filter the displayed list to show only benefits

where the eligibility rules are not considered.

2. Enter the payroll details for the garnishment.

a. In the Payroll details FastTab, set the calculation and the

deduction priority for the garnishment.

You might be required to calculate the garnishment amount

before or after other benefits the worker is enrolled in.

b. Enter the deduction basis and the amount in the Deductions

fields.

c. If there is a limit on the amount that can be deducted from the

worker for the garnishment, enter the amount in the Payroll

limits FastTab.

3. Enter the garnishment details.

a. Expand the Garnishment details FastTab.

b. In the Garnishment type field, select the type of garnishment

that you are entering. For example, select Support order for a

child or spousal support garnishment.

c. In the Case number field, enter the case number or the

reference number that is assigned by the court.

d. In the Limit method field, select how to calculate the maximum


6 - 14

amount that can be withheld from the worker. There are two

methods that you can select. They include the following:

Calculate disposable income – To use a disposable

income definition to calculate the maximum. If you select

this option, you select the definition in the Disposable

income definition field, and then enter the maximum

percentage of disposable earnings to withhold in the

Maximum withholding percent field.

Use alternative limit – To specify the maximum amount

to withhold in a single pay statement in the Alternative

limit field. This option makes sure that the total amount

that is deducted from the worker’s pay does not exceed

the legal limits. This option can be used when the worker

has more than one type of garnishment or tax levy, such

as a child support order, a student loan, and a federal tax

levy.

e. Optionally, in the Administrative fee field, enter the amount that

the garnishment deduction can be reduced by when the total of

an administrative fee plus the garnishment amount is too large.

When you enter an amount in this field it does not cause the

administrative fee to be deducted. For more information, refer to

the “Assign an Administrative Fee to the Worker” topic later in

this lesson.

f. If the court order for the garnishment specifies the method for

how to divide deductions between garnishments of the same

type, select the method in the Multiple garnishment method

field.

Demonstration: Enter a Tax Levy for the Worker

This demonstration shows how to enter a tax levy for the worker. In this example,

you will enter a federal tax levy.

Demonstration Steps

1. Select the worker and add the tax levy benefit.



c. Click Personal information > Benefits from the Related


d. Click Add.

e. In the Benefit field, select FedTaxLevy.

Note: Typically, tax levies are set up to bypass eligibility rules. Therefore, you


6 - 15

can select Eligibility bypassed to filter the displayed list to show only benefits

where the eligibility rules are not considered.

2. Enter the payroll details for the tax levy.

a. In the Payroll details FastTab, set the calculation and the

deduction priority for the tax levy.

You might be required to calculate the levy amount before or

after other benefits the worker is enrolled in.

b. Enter the deduction basis and the amount in the Deductions

fields.

c. If there is a limit on the amount that can be deducted from the

worker for the tax levy, enter the amount in the Payroll limits

FastTab.

3. Enter the tax levy details.

a. In the Tax levy type field, select the jurisdiction that is

responsible for the levy.

b. In the Case number field, enter the case number or the

reference number that is assigned by the court.

c. In the Limit method field, select how to calculate the maximum

amount that can be withheld from the worker. There are two

methods that you can select. These include the following:

Calculate disposable income – To specify the worker's

income that is exempt from the levy. Enter the amount in

the Income exempt from levy field. The amount is

usually provided by the court order.

Use alternative limit – To specify the maximum amount

to withhold in a single pay statement in the Alternative

limit field. This option makes sure that the total amount

that is deducted from the worker’s pay does not exceed

the legal limits. This option can be used when the worker

has more than one type of garnishment or tax levy, such

as a child support order, a student loan, and a federal tax

levy.

d. Optionally, in the Administrative fee field, enter the amount that

the tax levy deduction can be reduced by when the total of an

administrative fee plus the tax levy amount is too large.

When you enter an amount in this field it does not cause the

administrative fee to be deducted. For more information, refer to

the “Assign an Administrative Fee to the Worker” topic later in

this lesson.


6 - 16

e. If the order for the levy specifies the method for how to divide

deductions between levies of the same type, select the method

in the Multiple tax levy method field.

Assign an Administrative Fee to the Worker

The amount that is shown in the Administrative fee field on the garnishment or

tax levy benefit is not the administrative fee. The administrative fee is the amount

that is shown in the Deduction field on the administrative fee benefit.

In the Administrative fee field, you can show the amount that the garnishment

or the tax levy deduction can be reduced by, when the total of the administrative

fee plus the garnishment or tax levy is too large.

If the worker has more than one garnishment or tax levy, you must make sure

that the total amount for administrative fees matches the total amount for

deductions. There are two methods that you can use. They include the following.

You can assign one administrative fee benefit to the worker. You can

add the amounts in the Administrative fee field for all the

garnishments and tax levies, and then enter the total amount in the

Deduction field on the administrative fee benefit.

You can assign a separate administrative fee benefit to the worker for

each garnishment or tax levy. The amount in the Administrative fee

field for each garnishment or tax levy must match the amount in the

Deduction field on the corresponding administrative fee benefit.

When you enter the administrative fee, it resembles adding a normal, non-

garnishment benefit. You add the benefit to the worker record and then enter the

administrative fee amount in the Deduction field.


6 - 17

Lab A: Maintain Worker Benefit Details

Scenario

Alicia Thornber, a Purchasing Agent at Contoso Entertainment System USA has

decided to increase her contribution to the 401(k) retirement plan she is enrolled

in. Currently she contributes six percent of her earnings to the plan. Starting on

January 1, 2013, she wants to increase her contribution rate to seven percent.

Mia, the Payroll Administrator, must add the increase to Alicia's worker record so

that it is effective January 1, 2013.

Task 1: Change the Worker's Contribution Rate to the Worker’s

Retirement Plan

High Level Steps

1. Open the worker record.

2. Create a new version of the retirement plan's payroll details.

Detailed Steps

1. Open the worker record.

a. Click Payroll > Common >Workers > Workers.

b. On the Workers list page, double-click Alicia Thornber's worker

record.

c. On the Worker form, expand the Personal information FastTab.

d. Click the Benefits link in the More information section of the

Personal information FastTab.

2. Create a new version of the retirement plan's payroll details.

a. On the Maintain benefits form, select the 401(k) benefit from

the list on the left side of the form.

b. Click Maintain versions.

c. On the Maintain versions form, click the Payroll details tab.

d. On the Payroll details tab, click Add.

e. In the Effective field, enter "1/1/2013".

f. In the Deduction field, enter "0.0700".

g. Click Close.

h. Click Yes.


6 - 18

Benefit Accruals

For benefit accruals, such as sick time and paid time off, companies can choose to

have workers use only the hours that they have accrued, or the hours that they

will accrue in the current year. Before workers can start to accrue hours for paid

time off, they must be enrolled in a benefit accrual plan.

Enrolling workers in benefit accrual plans differs from enrolling the workers in

other benefits. Mass enrollment is not available for benefit accrual plans.

Benefit Accruals Form

You can use the Benefit accruals form to maintain benefit accrual plans for the

worker. For example, you can enroll the worker in a vacation plan that includes

three vacation weeks each year, or you can adjust the available balance in a sick

plan to grant the worker additional hours of sick time off.

To open the Benefit accruals form for the worker, follow these steps.

1. Click Payroll > Common > Workers > Workers.

2. Select the worker on the list page.

3. Click Personal information > Benefit accruals from the Related


The controls and fields on this form are described in the following tables.

Buttons

Button Information

New

Delete

Enroll the worker in a benefit accrual plan or

delete the worker’s enrollment from the plan.

You can add and delete enrollments only for

benefit accrual plans for the legal entity that

you are logged on to.

If there is a balance in the plan that is

created when a pay statement is submitted,

you cannot delete the worker enrollment

from the plan. If there are no balances in the

plan, or if there are only manual adjustments

or pending usage, you can delete the worker

enrollment from the plan.

If you select both the Stop accrual check

box and the Stop balance reduction check

box, this has the same effect as deleting the

worker enrollment from the plan.


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Button Information

Plan transactions Open the Benefit accrual transactions form.

Here, you can review the transactions in the

benefit accrual plan for the selected plan in

the current plan year.

Adjust Create a transaction to add hours to or

subtract hours from the plan balance.

Benefit accrual plan – The benefit

accrual plan that you are creating a

transaction for.

Adjustment type – The plan balance to

adjust.

Adjustment hours – The number of

hours to change the plan balance by.

Enter a positive number to add to the

balance or a negative number to

subtract from the balance.

Transaction date – The date must be in

the current plan year or a future plan

year.

Transactions that have a transaction date

that is in the current plan year are added

to the plan balances immediately. For

example, suppose that your plan year is

from January 1 to December 31. On

January 2, you add an accrued amount

with a transaction date of June 1. That

accrued amount is added to the balance

and it is available for the worker to use

on January 2, even though the

transaction date is June 1.

Comment – Information about the

adjustment.

All manual adjustments that you make are

accepted, even if that results in a plan

balance that does not meet the limits that

are set by the plan rules. To undo an

adjustment, create a new adjustment that

offsets the same amount that you added or

that adds the same amount that you

adjusted.


6 - 20

Fields

Grid headings Information

Benefit accrual plan

Description

The name and description of the benefit

accrual plans that the worker is enrolled in.

Only the benefit accrual plans for the legal

entity that you are currently logged on to are

available.

Plan year start The date when the plan year started for the

balances on the selected line.

Carry forward The number of hours that are carried forward

from the previous plan year to the current

plan year. This amount includes both the

hours that are carried over automatically and

any manual adjustments that are made.

Plan year accrued The number of hours that have accrued in

the plan during the current plan year. This

amount includes both the hours that are

recorded automatically and any manual

adjustments that are made.

Plan year used The number of hours that are used from the

plan during the current plan year. This

amount includes both the hours that are

recorded automatically and any manual

adjustments that are made.

Pending usage The number of hours that are in earning

statement lines that are released and

included on a pay statement. However, the

pay statement is not yet submitted for

payment.

Available The balance that is available for the worker

to use.


6 - 21

Grid headings Information

Accrual date basis The date to use to determine the worker’s

months of employment so that the correct

rule from a benefit accrual plan can be

selected. The value that is displayed is

defined by using the Default accrual date

basis field on the Payroll parameters form.

The plan rules are defined in the Benefit

accrual plans form. The months of

employment are based either on the

employment start date or on the seniority

date. The employment start date is in the

Employment history form, and the seniority

date is in the Worker form.

Best Practice: Make sure that you

enter the seniority date on the Worker form.

If you use the seniority date to determine the

months of employment, and the seniority

date in the Worker form is blank, the worker

can use hours from the benefit accrual plan.

However, no hours can accrue in the plan.

Stop accrual

Stop balance reduction

When the Stop accrual check box is

selected, no hours accrue in the plan for this

worker. If you clear this check box and the

worker does not accrue hours in the plan, the

plan balance has reached the maximum

accrual limit for the year. Review the plan

rules in the Benefit accrual plans form.

When the Stop balance reduction check

box is selected, validation does not occur for

hours used, and hours from the plan that are

used are not subtracted from the worker’s

available balance.

If you select both check boxes, it has the

same effect as removing the worker from the

plan. Neither accrual transactions nor usage

transactions are created when you submit a

pay statement, and the plan does not appear

on the pay statement or the payment.


6 - 22

Demonstration: Enroll the Worker in a Benefit Accrual Plan

This demonstration shows how to enroll the worker in a benefit accrual plan.

Demonstration Steps

1. Select the worker and open the Benefit accruals form.



c. Click Personal information > Benefit accruals from the

Related information group on the Action Pane.

2. Add the plan to the worker.

a. Click New.

b. In the Benefit accrual plan column in the grid, select a benefit

accrual plan.

c. Make sure that the value in the Accrual date basis field is correct.

If the accrual date basis is the Seniority date, make sure that a

seniority date is assigned to the worker.

Repeat these steps to enroll the worker in additional benefit accrual plans. When

you have finished, close the form.

Adjust a Benefit Accrual Balance

You can add and subtract hours from benefit accrual plan balances for the

worker. There are many reasons to adjust a balance in a benefit accrual plan.

These include the following:

If the worker is not enrolled in the plan when he or she should be

enrolled, you can adjust the amount that is accrued and the amount

that is used to include the correct amounts.

If the worker is granted some additional time off, you can add the

amount to the amount that is accrued.

If the worker has reached the maximum accrual limit, you can reduce

the amount that is accrued so that the worker can accrue additional

hours.

When you create the adjustment, you must select the type of adjustment that

you want to make. You can adjust the amount that is carried forward from the

previous year, the amount that is accrued this year, and the amount already used.


6 - 23

Reversing an Adjustment

To reverse an adjustment, create a second adjustment with the same type as the

adjustment that you want to reverse. Use the same value. However, use the

opposite sign as the adjustment to reverse. For example, to reverse a carry-

forward adjustment of 8.0 hours, create a carry-forward adjustment of -8.0 hours.

Demonstration: Adjust the Worker's Benefit Accrual

Balance

This demonstration shows how to adjust the benefit accrual balance for the

worker.

Demonstration Steps

1. Select the worker and the benefit accrual plan to adjust.



c. Click Personal information > Benefit accruals from the

Related information group on the Action Pane.

d. Select a plan in the grid area.

e. Click Adjust.

2. Add or subtract hours from the plan balance.

a. In the Adjustment type field, select the balance to adjust.

b. In the Adjustment hours field, enter the number of hours to

change the balance by. Enter a positive number to increase the

balance, and then enter a negative number to decrease the

balance.

c. Select a Transaction date. The date must be in the current plan

year or a future plan year.

d. Transactions that have a transaction date that is in the current

plan year are reflected in the plan balances immediately. For

example, suppose that your plan year is from January 1 to

December 31. On January 2, you add an accrued amount with a

transaction date of June 1. That accrued amount is added to the

balance and is available for the worker to use on January 2, even

though the transaction date is June 1.

e. Optionally, describe the reason for the adjustment in the

Comment field.

f. Click Adjust.


6 - 24

Stop the Worker's Enrollment

To stop the worker's enrollment in a benefit accrual plan, select a benefit accrual

plan on the Benefit accruals form, and then click Delete.

If the balance that the worker has in the plan includes an amount that is added to

the plan when a pay statement is submitted, you cannot delete the worker

enrollment from the plan. In this case, select the Stop accrual check box and the

Stop balance reduction check box. This has the same effect as removing the

worker from the plan.


6 - 25

Lab B: Adjust the Worker's Paid Time Off Balance

Scenario

Mia, the Payroll Administrator, maintains workers' benefit accrual balances and

she has to adjust them when the situation arises.

When Ahmed Barnett accepted an offer to work at Contoso Entertainment

System USA, he negotiated one additional week of paid time off (PTO). Ahmed is

already enrolled in the PTO benefit accrual plan, so Mia must adjust the amount

he has accrued so far. She will add 40 more hours to Ahmed's PTO balance and

set the transaction for the beginning of the year (1/1/2013).

Task 1: Adjust The Worker's PTO Plan Balance

High Level Steps

1. Open the benefit accrual plans that Ahmed is currently enrolled in.

2. Select the PTO plan and add the additional 40 hours.

Detailed Steps

1. Open the benefit accrual plans that Ahmed is currently enrolled in.


b. Select Ahmed Barnett in the Workers list page.

c. Click Personal information > Benefit accruals in the Related

information group of the Action Pane.

2. Select the PTO plan and add the additional 40 hours.

a. Select the PTO benefit accrual plan in the grid area.

b. Click Adjust.

c. In the Adjustment type field, select Amount accrued.

d. In the Adjustment hours field, enter "40.00".

e. In the Transaction date field, select "1/1/2013".

f. In the Comment field, enter "Negotiated PTO increase".

g. Click Adjust.


6 - 26

Bank Accounts

For workers that choose to or must use direct deposit to receive their wages, you

must enter their bank account information. Worker bank accounts are configured

on his or her worker record. Setting up the bank account and the distribution for

the worker designates that the worker will receive his or her wages through direct

deposit.

The bank account information, such as the account and routing numbers, that

you enter for the worker is shared across all the legal entities that employ the

worker. For each legal entity that employs the worker, you also must set up a

separate bank account distribution. By doing this, the worker can direct payments

for each position into different accounts or sets of accounts.

Additionally, you can set up a distribution of bank accounts for workers that want

to have their wage payments disbursed to multiple accounts.

Worker Bank Accounts Form

Bank account information for the worker is maintained on the Worker bank

accounts form. You can enter multiple bank accounts for the worker.

To open the Worker bank accounts form for the worker, follow these steps.



3. Click Personal information > Bank accounts from the Related


You enter most of the bank account information for the worker in the form

header and in the Bank account details FastTab. Use the Address and the

Contact information FastTabs to record the location and the contact details for

the bank.

The available fields in the form header and the Bank account details FastTab are

described in the following table.

Field Description

Account identification Enter a unique value for the identification

of the worker’s bank account.

Name Enter a name for the bank account.

Bank groups Select the bank group that is associated

with the selected bank account. Bank

groups are maintained in the Bank

groups form.


6 - 27

Field Description

Routing number type Enter a code that identifies the type of

routing number.

Routing number Enter the routing number for the bank

where the selected bank account is

located.

Bank account number Enter the bank account number.

Bank account type Specify whether the bank account is a

savings or a checking account.

Note: Sensitive financial information is displayed in this form. Make sure that

you set up security permissions for this form so that it does not put the worker’s

financial information at risk.

Set Up Custom Disbursements for the Worker

You can use the Bank account disbursements form to create a bank account

distribution for the worker. You can define flat wage amounts to direct into each

bank account. You must define the worker's bank accounts in the Worker bank

accounts form before you can create a distribution. You must create at least one

distribution for each legal entity that employs the worker.

To open the Bank account disbursements form for the worker, follow these

steps.



3. Click Personal information > Bank accounts from the Related


For each bank account in the distribution, you must add a new line to the grid

area, select the account from a list in the Account identification field, and then

enter the amount to direct to the account in the Amount field. Select Yes in the

Remainder field if the account should receive the remaining balance of funds

after all the other disbursements are complete. There must be at least one

remainder account in each distribution that you create for the worker.

Note: If the bank account that you enter in a disbursement is not yet

validated, you can specify that the transactions are sent to the bank as prenotes by

selecting Yes in the In prenote status field. After the bank confirms the prenote,

you must set the In prenote status field to No. Direct deposits cannot be processed

if the account is in the prenote status.


6 - 28

Position Assignment Changes

Typically, workers transfer between positions, are promoted to other positions, or

they are assigned to an additional position. When this occurs, the worker's new

position includes its own default earning code, pay cycle, and schedule.

You must make sure that the new position assignment for the worker is set up to

match the organization's plan for the new assignment.

Worker Position Assignment

For any worker, you can use the Position assignments form to view the worker’s

current and past assignments. On the Workers list page or the Worker form, to

open the form, click Worker position assignments in the Position assignment

group of the Action Pane. The form displays the worker's current position

assignments. You can use the Version button to view the assignments on any

date that you specify.

Updating Payroll Settings

Sometimes you might have to change the settings for the worker or the position

before you can generate earnings correctly. Consider the following questions.

Are any of the worker-specific earning codes for a previous position

assignment still necessary?

Does the default schedule for the position fit the new assignment?

Should the pay cycle for the position change?

Does the position assignment include a change to where the worker

resides?

Is the default tax region for the position correct?


6 - 29

Module Review

Much of the information that determines how the worker is paid is set up on his

or her worker record. This includes the worker’s position assignments, taxes, and

benefits. To accommodate exceptions to the default settings that are set up on

benefits, benefit accruals, and other earnings, you must use the worker record.

Some additional procedures that are described in this module include the

following:

Set up additional and custom earning codes for the worker.

Set up worker tax information.

Enroll the worker in benefits and benefit accrual plans.

Maintain worker benefits and benefit accrual plans.

Assign garnishments and tax levies to the worker.

Set up worker bank account information.

Test Your Knowledge


1. For the worker's regular earning codes, you have to add the code to the

worker to override the position's default earning code rate or amount.

( ) True

( ) False

2. You can mass enroll workers in a benefit accrual plan, such as vacation and

sick time.

( ) True

( ) False

3. You can mass enroll workers in regular benefit, such as a prescription medical

plan or vision insurance.

( ) True

( ) False

4. You can enter multiple concurrent residency locations for the worker.

( ) True

( ) False


6 - 30

5. How do you set up the worker to receive his or her wage payments through

direct deposit?

( ) Create a distribution of bank accounts in the Bank account

disbursements form for each position.

( ) Enroll the worker in a direct deposit benefit accrual plan.

( ) Enter a bank account for the worker in the Worker bank accounts

form.

( ) You must do both option 1 and option 3.

( ) You must perform options 1 through 4.

6. It is not important whether the worker's bank account is in the prenote

status, you can still process direct deposits to the worker’s bank account.

( ) True

( ) False

7. To add a tax levy to the worker record, you must click which of the following

links in the Worker form, in the Personal information FastTab?

( ) Government and organizational identifications

( ) Accommodations

( ) Injury or illness incidents

( ) Benefits

( ) Benefit accruals


6 - 31



1. For the worker's regular earning codes, you have to add the code to the

worker to override the position's default earning code rate or amount.

(√) True

( ) False

2. You can mass enroll workers in a benefit accrual plan, such as vacation and

sick time.

( ) True

(√) False

3. You can mass enroll workers in regular benefit, such as a prescription medical

plan or vision insurance.

(√) True

( ) False

4. You can enter multiple concurrent residency locations for the worker.

( ) True

(√) False

5. How do you set up the worker to receive his or her wage payments through

direct deposit?

( ) Create a distribution of bank accounts in the Bank account

disbursements form for each position.

( ) Enroll the worker in a direct deposit benefit accrual plan.

( ) Enter a bank account for the worker in the Worker bank accounts

form.

(√) You must do both option 1 and option 3.

( ) You must perform options 1 through 4.


6 - 32

6. It is not important whether the worker's bank account is in the prenote

status, you can still process direct deposits to the worker’s bank account.

( ) True

(√) False

7. To add a tax levy to the worker record, you must click which of the following

links in the Worker form, in the Personal information FastTab?

( ) Government and organizational identifications

( ) Accommodations

( ) Injury or illness incidents

(√) Benefits

( ) Benefit accruals

7 - 1

MODULE 7: PAYROLL PROCESSING

Module Overview

This module describes the steps that you must take to record the earnings for a

worker, calculate deduction and tax amounts, and issue payments.

You will use a combination of manual and automated steps when you process

payroll. These steps include the following:

1. Enter earnings. There are two entry methods.

o Automatically generate earnings for salaried positions, positions

that use a schedule, a scheduled leave, and for other recurring

earnings.

o Manually enter earnings. The earnings can be for events, such as

sick time and bonus pay that does not recur or hourly earnings

that cannot be generated from a schedule.

2. Review the generated earnings, and put holds on any incorrect

earnings.

3. If it is necessary, change earnings.

4. Release earnings to process payments for workers.

5. Generate pay statements from earnings statements to calculate

benefits, deductions, and net payments.

6. Issue worker payments.

7. Post payroll to the general ledger.

8. Generate vendor invoices.


7 - 2

FIGURE 7.1:PROCESSING THE PAYROLL FLOWCHART

Earnings Statements and Pay Statements

In Microsoft Dynamics AX, the payroll process uses two documents—the earnings

statement and the pay statement. When you work with these statements there

are several important elements to remember.

All earnings, such as salary or hourly wages and any recurring earnings must be

included on an earnings statement before the worker can be paid for the

earnings. The earnings statement does not include deductions that are related to

benefits that the worker is enrolled in, nor does it include any tax amounts.

The pay statement is generated from earnings on the earnings statement. The

pay statement also includes the calculated deduction, contribution, and tax

amounts that are related to the earnings. The pay statement is posted to the

general ledger to account for the payroll transactions.

Module 7: Payroll Processing

7 - 3

About the Labs and Demonstrations in this Module

Note: To successfully complete the labs in this module, you must perform all

of the labs in the described order. To perform the demonstrations described in this

document, you generally must have also performed all labs prior to the

demonstration.

Objectives

The objectives are:

Create earnings for workers on an earnings statement.

Change worker earnings.

Release earnings for payment.

Generate pay statements in preparation for issuing payments.

Issue worker payments.

Post payroll to the general ledger.

Generate vendor invoices for benefits and taxes.


7 - 4

Generate Worker Earnings

Microsoft Dynamics® AX 2012 R2 offers several ways to generate earnings for

workers. You can automatically generate earnings for salaried positions, positions

that use a schedule, and for recurring earnings. This process also creates earnings

for any leave that is entered for a worker, and you can also manually enter

earnings. All worker earnings must appear on an earnings statement. For any

method that you use, you must create one earnings statement for each pay

period for each worker.

Typically, most earnings are automatically generated. However, you can enter

some earnings manually, such as vacation or jury duty. When you enter these

types of earnings, you can manually enter the earnings and then use the

automated process to calculate the standard earning lines. Or, you can use the

automated process first, and then add and remove the earning lines until the

earnings statement is correct.

A Review of the Required Setup

Before you can generate earnings for the worker, some required information

must be set up in the payroll system. This information includes the following:

Set up the number sequence for earnings statements in the Payroll

parameters form.

Create and assign a compensation plan to each worker position

combination for the legal entity that you will generate earnings for.

Compensation plans are set up in the Human resources module.

Note: Verify that the effective date and the expiration date of the

compensation plan are valid for the pay periods that you are generating earnings

for.

Make sure that tax information is set up for every worker that you

will generate earnings for.

Make sure that workers are enrolled in the correct benefits.

Create earning codes that are active for the dates to generate

earnings for and assign the earning codes to the position and the

worker.


7 - 5

Earnings Statement Form

Use the Earnings statement form to create and maintain earnings statement

lines and to release and hold lines.

Click Payroll > Common > Earnings statements > Earnings statements to

open the list page. Click Earnings statement in the Action Pane to create a new

statement or double-click an earnings statement on the list page to open an

existing statement.

The earnings statement is made of up a header and lines. The FactBoxes that are

on the right side of the form display information about the position the earnings

are created for, the earnings totals for the earnings statement, and links to the

pay statements for which the earnings are created.

The earnings statement is not posted to the general ledger. You can use the

earnings statement to create, review, and maintain the worker’s earnings before

you create a pay statement from the earnings. You can review and update the

accounting distributions for an earning from the earnings statement line.

The buttons and fields on this form are described in the following tables.

Action Pane Controls

Button Definition

Edit

Modify the earnings statement.

Delete

Delete the earnings statement.

You can delete only earnings statements in

which no lines are processed.

Earnings statement Create a new earnings statement.

Earnings statement lines Generate earnings statement lines for the

worker, pay cycle, and the pay period that

are specified in the earnings statement

header. After you click this button to create

default earnings statement lines, you can

add and remove lines to modify values.

The generation process will not overwrite

or discard earnings statement lines that

you add manually, whether you add them

before or after you generate earnings

statement lines.


7 - 6

Button Definition

Release earnings statement Select all the lines on the earnings

statement that are not processed as ready

for payment. Generally, earnings statement

lines are released for payment after the

earnings statement lines are reviewed.

Hold earnings statement Put all the earnings statement lines that

are not processed on hold to prevent the

earnings statement lines from being

processed.

Pay statement Generate a pay statement from any

released earnings in the selected earnings

statement.

View distributions Open the Accounting distributions form.

Here, you can view and modify how each

line on the earnings statement is

distributed.

Calculate Salary By default, this option is selected for

positions that are designated to have a

salary calculated for them. When you add

new lines or change earning statement

lines, the other values are automatically

adjusted to make sure that the worker is

always paid the same salary amount.

Note: When this control is turned off,

the automatic salary calculation for

salaried positions is turned off so that the

workers’ set salary might not be calculated

correctly. Typically, this is only disabled for

unique situations, such as employee

terminations.

Earnings Statement Header

Field Definition

Worker

The name of the worker who will receive

the earnings.

Pay cycle The pay cycle that is selected when the

earnings statement is generated and that is

assigned to the position.

Pay period The date range of the pay cycle.


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Field Definition

Earnings statement number The unique ID assigned to the earnings

statement.

Note More information about the earnings

statement.

Note: Select an earning line and

expand the Line details tab to enter notes

about a specific earning line.

Earnings Statement Lines: Buttons

Button Definition

Add line

Remove

Manually add or remove earnings

statement lines. The Source field on the

line will be set to User entry for earnings

statement lines that are manually entered.

Distribute earnings

Open the Accounting distributions form.

Here, you can view and modify how the

selected earnings statement line is

distributed.

Distributions are created that use the main

account from the earning code or from the

project Category if a project is specified.

The dimension and template values that

are displayed on the Financial dimensions

tab are combined with the main account.

The dimension values in the Accounting

distributions form for an earning line can

be changed. The main account cannot be

changed because it is always derived from

either the earning code or the project

category.

Note: To view all the earnings

statement line distributions, click View

distributions on the Action Pane.


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Button Definition

Release lines for payment Release the selected lines so that they can

be processed. Only earnings statement

lines that are fully distributed can be

released.

When you release an earning line for

payment, an icon will appear that indicates

the value of the payment status. This value

is also displayed in the grid.

To release all the earnings statement lines

on this earnings statement, click Release

earnings statement on the Action Pane.

Hold lines for payment Put the selected earnings statement lines

on hold to prevent the selected earnings

statement lines from being processed. You

can only put lines on hold that are not yet

processed.

When you hold the earning line for

payment, an icon appears. It shows the

value of the payment status, and the value

is also displayed in the grid.

To hold all the earnings statement lines on

this earnings statement that are not yet

processed, click Hold earnings statement

on the Action Pane.

Earnings Statement Lines: Fields

Fields Definition

Earnings date The date when the earning is earned by

the worker. This date must occur in the pay

period that is specified for the earnings

statement.

Position The unique identifier that is assigned to

the position that will receive the earnings.

Tax region The default tax region for the line

originates from the worker position

assignment. However, it can be changed to

any tax region that is defined for the

worker. The tax region is used in tax

calculations when you create pay

statements.

Earning code

Description

The name and description of the earning

code.


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Fields Definition

Quantity

Unit type

Rate

Amount

The quantity is multiplied by the rate to

determine the earning line amount. The

quantity should be appropriate for the unit

type. The unit type is assigned to the

earning code.

Note: The rate cannot be changed if

it is automatically calculated. It can only

be changed for flat rate earnings.

Payment status

The payment processing status. By default,

earning lines will have a status of None.

When payment lines are released for

payment, the status changes to Released.

When the lines are processed into pay

statement lines, the status changes to

Processed.

Note: If you put a line on hold, the

status will change to On hold, and the line

will not process until you release it.

Line Details: General Tab

Field Definition

Workers' compensation

code

The workers’ compensation code is copied

from the position. However, it can be

changed for each earning line.

The tax region state and the workers’

compensation code state must be the

same for each earning line.

General liability insurance The general liability insurance is copied

from the position. However, it can be

changed for each earning line.


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Field Definition

Manual When this check box is selected, the

earning statement line is processed in a

manual payment run. Manual payment

runs are used to record payments that are

not made by using the Payroll module.

The earning code for these earnings must

not be set up for a fringe benefit or a gross

up payment run type. The rate basis must

be a flat amount.

Accounting date The accounting date for the earning line is

used for the earnings when the pay

statement is journalized.

If pay statement earning lines are

summarized, the accounting date for each

earning line is the pay period end date. If

pay statement lines are not summarized,

the accounting date for each earning line

uses the earning line date.

Note: The default date for this field

is determined by the Accounting date

options for earnings selection in the

Payroll parameters form.

Source The source of the earning line can include

the following:

Salary lines are generated if you set up

the position for salary earnings.

Recurring earnings are generated

when earning codes are added to

individual workers.

Imported lines are imported from an

external source.

Position schedule lines are imported

from a schedule that is assigned to the

position.

Worker leave lines are generated when

the earning is entered in the Leave

form.

This field is set to User entry if you

manually enter the line.


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Field Definition

Line modified If this check box is selected, the earning

line is generated by an automated process

and manually changed later.

Note More information about the earnings

statement line.

You can enter general notes about the

completed earnings statement in the Note

field on the Earnings statement header

tab.

Line Details: Project Tab

Fields Definition

Project ID

Category

Activity

Line property

The Project tab contains optional fields

that are used to specify that an earning

line is for a project. If you enter a project

ID, the category is required. Additional

fields that are optional when a project and

category are specified are the project

Activity and the Line property.

Line Details: Financial Dimensions Tab

Fields Definition

Template ID

Default financial

dimensions

The Financial dimensions tab contains

fields for an accounting distribution

template and financial dimension values.

The template ID that is assigned to the

earning code is used. However, if this is not

available, the template ID from the

position is used.

Note: The dimension values

originate from the combination of the

financial dimension that is specified for the

earning codes and the position, with the

earning code dimension values having

precedence.


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Earnings

Worker earnings can originate from several sources. Typically, earnings are

generated from a schedule or from a salary-based compensation plan. You can

also manually enter earnings for a worker. The source of each line on an earnings

statement is identified in the Source field in the Line Details FastTab.

For each earning element, a line is created on an earnings statement. Depending

on the position configuration, earnings statement lines might be created for each

day, or a single line might be created for the whole pay period.

Earnings Generated For Salaried and Schedule-Based Positions

Salary earnings are automatically generated when you run the Generate

earnings process. Things to consider about salary earnings include the following:

Positions that are identified as salaried positions should receive their

base earning amount whether they have or do not have earnings

manually entered. For example, if you enter eight hours of sick time,

the earning statement lines are adjusted so that the worker does not

receive more or less than his or her authorized position salary

amount.

Recurring earnings and the earnings from schedules are created first

because salary amounts might be affected by other earnings that are

automatically generated if they are considered base salary

components.

Note: If you enter earning lines manually after you have generated earnings,

the other earning lines are recalculated so that the worker's pay is accurate. If you

do not want the system to recalculate the earning lines so that the salary is correct,

you can click the Calculate Salary button on the earnings statement to keep the

line values unchanged. However, typically you will only do this if you terminate a

worker’s employment.

The default main account and financial dimensions for the earning

line are based on the earning code accounting rule and the default

dimensions and dimension templates that are defined for the earning

code or the position.

Earning statement lines that are generated by the system and that

are calculated for salary earnings have a Source of Salary in the

earning statement line detail. System-generated lines for earnings

based on a schedule have a Source of Position Schedule.

The earnings statement lines that are created or updated have a

Payment status of None.


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By default, when you generate the worker’s earnings for unpaid

leave, earnings are not created from the worker’s position schedule

for the leave days.

When you generate the worker's earnings for paid leave, you must

assign a schedule to the position that the worker is taking leave from.

You must do this, even when the leave is for a salaried position.

Recurring Earnings

Recurring earnings are assigned to workers and they occur regularly. Some

examples are a monthly car allowance or a uniform allowance that is based on

the pay period amount and is earned each pay period. Recurring earnings are

automatically generated when earnings are generated. Things to consider about

recurring earnings include the following:

Worker payroll earning codes that have a frequency that is specified

will be generated if the frequency is in the pay period for which the

earnings are being generated.

Note: Only earning codes that have Each assigned as the units of measure

require a frequency.

The fixed compensation plan is determined by the worker, position,

and legal entity combination. This provides the fixed compensation

rate. This rate is used in the worker earning code formula to

determine the earning amount.

Note: If the earning is a flat amount, fixed compensation plans are not used.

If a recurring earning is generated, the Source of the earning line will

be set to Recurring in the Earnings statement form.

If a recurring earnings statement line is generated that is identical to

one that you have entered manually, both lines will exist. However,

the Source will be different. (The manually-entered line will be the

source User entry and the system-calculated source will be

Recurring in the earning statement line detail.)

The default main account and financial dimensions for the earning

line are based on the earning code accounting rule and the default

dimensions and the dimension templates that are defined for the

earning code or the position. The distributions for the earning lines

can be viewed and modified in the form.

The earnings statement lines that are created or updated have a

payment status of None.


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There can only be one earnings statement for a worker for a pay cycle and pay

period. If an earnings statement already exists for the worker, pay cycle, and pay

period, the system will open the existing pay statement instead of creating a new

one.

Demonstration: Creating an Earnings Statement For an

Hourly Worker

This demonstration shows how to manually enter an earning on a new earnings

statement for an hourly worker.

Note: You must know the pay cycle for the worker's position before you

create the earnings statement.

Demonstration Steps

1. Create a new earnings statement.

a. Click Payroll > Common > Earnings statements > Earnings

statements.

b. Click Earnings statement in the New group of the Action Pane.

c. In the Worker field, select Jimmy Bischoff.


e. Select the Pay period to enter the earnings for.

f. Enter any additional information that might be helpful in the

Note field.

2. Click Add line and enter the following information about the

earning.

a. Modify the Earnings date if it is not the pay period end date.

b. Select the Position in which the worker earned the earnings.

c. Select the Tax region.

Note: By default, the worker's position and tax region are entered, if the

worker is assigned to only one position.

d. In the Earning code field, select Regular.

When you select the earning code, the default Description,

Quantity, Unit type, and Rate are automatically entered on the

earnings line.

e. In the Quantity field, enter the number of regular hours that the

employee worked during the pay period.

f. Repeat step 2 for any additional earnings, such as overtime.


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Demonstration: Creating an Earnings Statement For a

Salaried Worker

This demonstration shows how to manually enter a nonrecurring earning on a

new earnings statement for a salaried worker.

Note: You must know the pay cycle for the worker's position before you

create the earnings statement.

Demonstration Steps

1. Create a new earnings statement.


statements.


c. In the Worker field, select Tony Krijnen.

d. In the Pay cycle field, select the semimonthly pay cycle.

e. In the Pay period field, select the pay period that ends on

1/15/2013.

f. Enter any additional information that might be helpful in the

Note field.

2. Click Add line and enter the exceptions to the worker's typical

schedule. For example, enter the vacation or sick time that the

worker used during the selected pay period.

a. Modify the Earnings date if it is not the pay period end date.

b. Select the Position in which the worker earned the earnings.

c. Select the Tax region.

d. Select the Earning code that represents the type of earning. For

example, select Sick for the worker who is ill.

When you select the earning code, the default Description,

Quantity, Unit type, and Rate are automatically entered on the

earnings line.

e. Optionally, you can enter a quantity that is appropriate for the

Unit type and can change the rate, as long as it is a flat rate and

is not calculated by the system.


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3. Optionally, generate the rest of the worker's recurring earnings. If

you skip this step, the rest of the worker's regular earnings are

generated when you close the form.

a. Click Earnings statement lines in the Generate group of the

Action Pane to use the default values in the rest of the worker’s

earning statement lines without affecting the lines that you

entered manually.

b. Close the form to save the earnings statement.

Automatically Generate Earnings

Earnings that are automatically generated use settings from the position. These

settings identify the pay cycle, legal entity, and whether the earnings will be

generated as a salary amount or from a schedule. Recurring earnings that are

assigned to a specific worker are automatically generated at the same time if they

are due in the specified pay period and pay cycle.

When you generate worker earnings, you only designate the pay cycle and the

pay period to use. You do not specify the type of earning to generate. In other

words, recurring earnings, salary, leave, and schedule-based earnings are all

created in the same process.

Generate Earnings For All Workers in a Pay Cycle

Use the Generate earnings form to generate earnings statements for all

positions that are in the pay cycle and the pay period that you specify. You can

only generate earnings for a single pay cycle and pay period combination one at

a time. Click Payroll > Periodic > Earnings statement processing > Generate

earnings to open the form.

To view the earnings statements that are created or updated, open the Earnings

statements list page.

Generate Earnings For a Single Position or Worker

You can generate a single earnings statement for a worker directly from the

Position or Worker form. Select the Payroll tab on the form's Action Pane and

then click Earnings Statement in the Generate group to generate earnings for

the selected worker or for the worker that is assigned to the selected position.

You must select the pay cycle and the pay period to generate the earnings for.


7 - 17

Demonstration: Generate Earnings For a Single Worker

This demonstration shows how to generate regular recurring earnings for a single

worker from the Worker form. You can perform a similar task by using the

Positions form.

Note: You must know the pay cycle for the worker's position before you can

generate the earnings statement for the worker.

Demonstration Steps

1. Select the worker to generate earnings for.


b. Double-click the worker to enter earnings for.

c. On the Worker form, select the Payroll tab on the Action Pane.

d. Click Earning statement in the Generate group of the Action

Pane.

2. Select the pay cycle and the period to generate earnings for.

a. On the Generate earnings statement dialog box, select the Pay

cycle for the worker position.

b. Select the Pay period to generate earnings for.

c. Click OK.

Demonstration: Generate Earnings For a Pay Cycle

This demonstration shows how to use the Generate earnings form to generate

earnings statements for all active positions in a single pay cycle.

Demonstration Steps

1. Run the Generate earnings process.

a. Click Payroll > Periodic > Earnings statement processing >

Generate earnings.

b. In the Pay cycle field, select the pay cycle of the worker positions

to process.

c. In the Pay period field, select the pay period for the worker

position earnings. The pay periods displayed are available for the

pay cycle. The first open pay period is the default pay period.

However, you can select any open pay period from the list.


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d. Click OK to generate the earnings statements. A message is

displayed to indicate that the earnings statements are generated

successfully.

Note: Recurring earnings and the earnings from schedules are created first

because salary amounts might be affected by other earnings that are automatically

generated.

e. Close the form.

2. Review the generated earnings statements.


statements.

The generated earnings statement for the pay cycle that you

selected is displayed in the list page.

Import Earnings

In Microsoft Dynamics AX, you can import earnings from an external system

through the document services feature. Document services are set up in the

System administration module.

Typically, solutions to import earnings data from third-party systems are

developed by value-added resellers.


7 - 19

Lab A: Create Worker Earnings

Scenario

Mia, the Payroll Administrator, is preparing to run payroll for two pay cycles with

pay periods that end near the last week of June 2013. Before she starts to

generate earnings and pay statements for the employees' regular earnings she

will create earnings statements for employees who are sick, earned overtime, and

so on. Mia prefers to work on the earnings exceptions to the regular payroll

before she generates the earnings for the rest of the employees.

Mia must create the following earnings:

Enter time for one of the hourly employees, Bill Malone.

Record the vacation time that is taken by Ellen Gasca.

Add a relocation reimbursement for Kevin Cook.

Generate earnings for all positions in two pay cycles.

When Mia is finished, Claire, her manager will review the earnings before she

releases the earnings for payment.

Exercise 1: Enter Earnings For Hourly Workers

Exercise Scenario

Bill Malone is one of the few employees at Contoso Entertainment System USA

that records the time he works on the company's timekeeping system. Every

week Mia receives an email with the logged time for each worker that uses the

timekeeping system. She must manually enter the earnings for workers, such as

Bill.

Bill's position is on the weekly pay cycle. For the pay period ending on 6/30/2013,

Bill worked 40.000 hours of regular time and 3.4833 hours of overtime.

Manually create Bill's earnings statement.


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High Level Steps

1. Create the new earnings statement.

2. In the Earnings statement lines pane, add the earnings statement

lines for Bill's regular and overtime hours.

Detailed Steps



statements.


c. In the Worker field, select Bill Malone.



6/30/2013.


lines for Bill's regular and overtime hours.

a. Expand the Earnings statement lines FastTab.

b. In the Earning code field, select Regular.

c. In the Quantity field, enter "40.0000."

d. Click Add line.

e. In the Earning code field for the new earnings line, select

Overtime.

f. In the Quantity field, enter "3.4833."

g. Click Refresh to update the earnings totals.

Exercise 2: Enter Paid Time Off

Exercise Scenario

Recently, Ellen Gasca, the Warehouse Manager, requested some time off. She

notified Mia through the company's internal paid time off tracking system. Ellen

used eight hours of vacation time on two days—6/21/2013 and 6/24/2013.

Ellen's position is in the semimonthly pay cycle, and the vacation days occurred in

the pay period that ends on 6/30/2013.

Manually create an earnings statement to include two days by using the Vacation

earning code.


7 - 21

High Level Steps



lines for Ellen's vacation hours.

Detailed Steps



statements.


c. In the Worker field, select Ellen Gasca.



6/30/2013.


lines for Ellen's vacation hours.

a. In the Earnings date field, enter "6/21/2013."

b. In the Earning code field, select Vacation.

c. In the Quantity field, enter "8.0000."

d. Click Add line.

e. In the Earnings date field, enter "6/24/2013."

f. In the Earning code field, select Vacation.

g. In the Quantity field, enter "8.0000."

h. Click Refresh to update the quantity in the automatically

generated earnings line for Ellen's salaried earnings.

i. Click Close.

Exercise 3: Enter a Relocation Expense

Exercise Scenario

After a recent corporate restructuring, Kevin Cook, the Sales Manager, moved, so

he now works in a different office. Contoso agreed to reimburse Kevin $1,000.00

United States dollars (USD) toward his moving costs.

Mia is notified of the reimbursement through an email message she received

from Kevin's manager.

Manually create an earnings statement to add the Relocation expense earning to

Kevin's regular salary. Kevin's position is in the semimonthly pay cycle and the

earnings should be added to the earnings for the 6/15/2013–6/30/2013 pay

period.

High Level Steps


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1. Open Kevin Cook's worker record.

2. Add the bonus earnings to the earnings statement that you created.

Detailed Steps

1. Open Kevin Cook's worker record.


b. Double-click Kevin Cook's worker record.

c. On the Worker form, click Earning statement in the Payroll tab

of the Action Pane.



6/30/2013.

f. Click OK.

g. Click Close to dismiss the Infolog that appears.

h. Click Close to close the Worker form.

2. Add the bonus earnings to the earnings statement that you created.


statements.

b. Double-click the earnings statement that you created for Kevin.

c. In the Earnings statement lines pane, click Add line.

d. In the Earning code field, select Relocation expense.

e. In the Rate field, enter "1000.00."

f. Click Refresh to update the earnings totals.

g. Click Close.

Exercise 4: Generate Earnings

Exercise Scenario

Now that she has finished adding the non-regular earnings, Mia generates the

regular earnings for workers. Mia is working with two pay cycles that have pay

periods that end in late June 2013. Use the Generate earnings form to create the

earnings statements for the following pay cycles:

Cycle one

o Pay cycle: Biweekly

o Pay period: 6/10/2013–6/23/2013

Cycle two

o Pay cycle: Semimonthly

o Pay period: 6/15/2013–6/30/2013

High Level Steps

1. Generate earnings for the positions in the semimonthly pay cycle.


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2. Generate earnings for the positions in the biweekly pay cycle.


Detailed Steps

1. Generate earnings for the positions in the semimonthly pay cycle.


Generate earnings.

b. In the Pay cycle field, select the semimonthly pay cycle.

c. In the Pay period field, select the pay period that ends on

6/30/2013.

d. Click OK.

e. Click Close to dismiss the Infolog message that appears.

2. Generate earnings for the positions in the biweekly pay cycle.


Generate earnings.

b. In the Pay cycle field, select the biweekly pay cycle.


6/23/2013.

d. Click OK.




statements not processed.

Work With Earnings Statements

Now that you have generated or otherwise created earnings, you must make sure

that the earnings are ready to be included on a pay statement. To prepare the

earnings, you must review the earnings statements and make any necessary

changes. You can put earnings on hold so that they are excluded from the

payment process or release earnings so that they are available for payment.

Earnings must be released before you can issue payment for the earnings.


7 - 24

Review Earnings Statements

After you have created or generated earnings for workers, it is recommended

that you review the earnings before the payments are issued. Your organization

might decide to have a payroll or finance manager review the earnings before

payments are issued. Although an official approval process is not required,

earnings must be released before you can include the earnings on a pay

statement.

Earnings Statement List Pages

List pages are the quickest way to review earnings for a batch of earnings

statements. Microsoft Dynamics AX includes several list pages that are

preconfigured to show only a specific set of earnings statements. The list pages

are described in the following table.

List page Description

Earnings statements All earnings statements.

Released earnings statements Earnings statements where all lines

are in the Released payment state.

Processed earnings statements Earnings statements where all lines

are in the Processed payment state.

Lines are considered processed when

they are included in a pay statement.

Earnings statements on hold Earnings statements where all lines

are in the On hold payment state.

Earnings statements not

processed

Earnings statements where all lines

are in the None payment state. The

None payment state indicates that

there no action taken on the earnings

statement line.

For earnings statements with lines in a mix of payment states, the earnings

statement will only appear on the Earnings statement list page. For example, if

the worker's statement includes one line that is on hold and the rest of the lines

are not yet processed, the statement is displayed only on the Earnings

statement list page.

Review Accounting Distributions

Now is a good time to review how the earnings are considered. Although the

earnings statement is not posted to the general ledger, the accounting for

earnings statement lines are viewed and updated before they are included in a

pay statement. Remember that taxes and benefit amounts are not yet calculated.

Therefore, the complete ledger effect is not displayed.


7 - 25

You can select to view the accounting distributions for the whole earnings

statement or for a single earnings statement line by using the Earnings

statement form. Click View distributions on the Action Pane to view the

distributions for all the earnings that are on the earnings statement. To view the

distribution for a single line, select the line and then click Distribute earnings.

When you view a single line, you can also make a change to the distribution on

the Accounting distributions form.

Hold and Release Earnings

By releasing earnings, you do not create pay statements for the position that the

earnings are for, this only makes the earnings available so that they can be

included on a pay statement. To release all earnings lines on an earnings

statement, click Release earnings statement in the Action Pane on the Earnings

statement form or on the list page. You can also release individual earnings

statement lines.

When you release an earnings statement line for an accrued benefit, such as sick

time or vacation time, the hours that are in the line are verified against the

minimum balance that is required by the benefit accrual plan. If the balance

includes fewer hours than the hours that are in in the line, the line is not released.

Putting holds on earnings prevents the earnings from being included in a

payment. You can select to hold individual earnings statement lines and release

other earning statement lines. You can always release held earnings later.

Demonstration: Modify an Earnings Statement

After you have generated an earnings statement, you can add lines to it, and then

change existing lines. However, you can do this only if the lines are not released

or processed.

Released lines can be deleted, but processed lines cannot be deleted.

Note: To modify earnings statement lines that are included in a pay

statement, you must delete the pay statement and put the earnings statement lines

on hold before you make the changes.

Demonstration Steps

1. Open the earnings statement.



b. Double-click the earnings statement to modify.


7 - 26

2. Make the changes to the earnings statement lines in one or more of

the following ways.

o Click Add line to insert a new earnings statement line. For

example, add eight hours of paid vacation to the worker's

earnings or add the overtime that is worked during the pay

period.

o Click Remove to delete an earnings statement line.

o Click Edit in the Maintain group of the Action Pane and update

an existing line. For example, you can select to associate the

earnings with a project in the Line Details FastTab or click

Distribute earnings in the Earnings statement lines Action

Pane to redistribute the earnings among many ledger accounts.

Best Practice: Do not turn off the Calculate Salary function.

If you modify or add a line for a salaried worker, the line will be calculated and re-

created that has a source of Salary unless you select the Calculate Salary button.

This helps make sure that a salaried worker does not receive more or less than his

or her regular pay period amount.

Demonstration: Hold Earnings From Payment Processing

This demonstration shows how to put earnings on hold. You can put one or more

earning statement lines on hold so that you can change information or correct

errors. You can do this to prevent the earnings from being included in a pay

statement.

When you perform this task, it changes the payment status for the earnings to

On hold and prevents the earning from being included in a pay statement. You

can put the earnings on hold by using the following three methods.

Demonstration Steps

Put the earnings statement on hold.


statements.

b. Select one or more earnings statements to put all the lines on

hold.

c. Click Hold earnings statement in the Process group of the

Action Pane.

The Payment status will be set to On hold so that the lines will

not be included in any pay statements until you release the lines

for processing.


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Put the individual earnings statement lines on hold.


statements.

b. Double-click the earnings statement for which to hold earnings.

c. On the Earnings statement form, select the earnings statement

line to put on hold.

d. Click Hold lines for payment in the Earnings statement lines

pane.

The Payment status for the line is changed to On hold.

Put all earnings statements for a pay cycle on hold.


Hold earnings statement.


to process.


position earnings. The pay periods that are displayed are

available for the pay cycle. The default pay period is the first

open pay period. However, you can select any open pay period

from the list.

d. Click OK to put all earnings statements in the pay cycle on hold.

Demonstration: Release Earnings For Payment

This demonstration shows how to release earnings for payment. After the

earnings are released they can be included on the pay statement.

When you perform this task, it changes the payment status for the earnings to

Released. You can release the earnings by using the following three methods.

Demonstration Steps

Release a single earnings statement for payment.


statements.

b. On the list page, select the earnings statement to release.

c. Click Release earnings statement in the Process group of the

Action Pane to set all earnings statement lines that have a

Payment status of None to Released.

Release individual earnings statement lines for payment.


statements.


7 - 28

b. Double-click the earnings statement that contains the earnings

lines to release.

c. In the Earnings statement lines pane, select the line to release.

d. Click Release lines for payment in the Action Pane Strip.

The Payment status for the line is set to Released.

Release earnings for a pay cycle.


Release earnings statement.


to process.


position earnings. The pay periods that are displayed are

available for the pay cycle. The default pay period is the first

open pay period. However, you can select any open pay period

from the list.

d. Optionally, select the Release lines on hold check box to release

all the individual lines that are on hold in the earnings

statements.

e. Click OK to change all the earnings statements that have a

Payment status of None to Released so that the earnings

statements can be processed.


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Lab B: Maintain the Earnings Statements

Scenario

After Mia finished generating the earnings statements, she notified Claire, the

Payroll Manager, that the earnings statements are ready for review.

Claire, the Payroll Manager, reviews the batch of earnings statements. She

identifies two statements that should be put on hold so that Mia can make some

changes. The earnings statements are for the following workers:

Lars Giusti

Kevin Cook

Lars reported for jury duty for two days. Contoso's policy is to enter a Jury duty

earning line for the days that employees report to the courthouse. Kevin Cook

recently moved and worked in two offices during the same pay period. Mia must

update the tax regions on Kevin's earnings so that he is taxed correctly.

Lab Setup

To complete this lab, you must have successfully completed the previous labs in

this module.

Exercise 1: Put Earnings on Hold

Exercise Scenario

First, Claire puts the earnings statements for the following workers on hold.

Lars Giusti

Kevin Cook

After she is finished, Claire instructs Mia to make the necessary changes to the

statements.

High Level Steps

1. Put the three earnings statements on hold.

Detailed Steps

1. Put the three earnings statements on hold.



b. Filter the list page to display only earnings statements with a pay

period end date of 6/30/2013.

c. Select the check box next to the earnings statements for Lars

Giusti and Kevin Cook.


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d. Click Hold earnings statement in the Process group of the

Action Pane.


f. Click Payroll > Common >Earnings statements > Earnings

statements on hold to open the list page that displays only the

earnings statements that are currently on hold.

Exercise 2: Update Earnings For a Worker on Jury Duty

Exercise Scenario

Recently, Lars Giusti reported for jury duty. Now, Mia must record the two eight-

hour days that Lars spent in court as a Jury Duty earning line. By doing this, at the

end of the year, Contoso can analyze how much time workers have spent

performing jury duty.

Mia must enter the Jury Duty earning code for the two days that Lars spent in

court—6/24/2013 and 6/25/2013.

High Level Steps

1. Open the earnings statement that is on hold for Lars.

2. Add two new earnings lines to the statement to show that Lars is

called in for jury duty.

Detailed Steps

1. Open the earnings statement that is on hold for Lars.

a. Click Payroll > Common >Earnings statements > Earnings



b. Double-click the earnings statement for Lars Giusti.

2. Add two new earnings lines to the statement to show that Lars is

called in for jury duty.

a. In the Earnings statement lines pane, click Add line.

b. In the Earnings date column for the new row, enter "6/24/2013."

c. In the Earning code column, select Jury Duty.

d. In the Quantity column, enter "8.000."

e. Repeat steps 3 through 6 for the 6/25/2013 earnings date.

f. Click Release earnings statement in the Process group of the

Action Pane.


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Exercise 3: Change Tax Regions on Earnings

Exercise Scenario

Kevin Cook, the recently relocated Sales Manager, worked in two offices during

this last pay period. Mia must record the 40 hours that Kevin worked in the

Wilmington, Delaware office so that his taxes are calculated correctly.

High Level Steps

1. Open the earnings statement that is on hold for Kevin.

2. Create a new earnings statement line for the work Kevin performed

in the Wilmington office.

3. Release the regular salary earning lines.

Detailed Steps

1. Open the earnings statement that is on hold for Kevin.

a. Click Payroll > Common >Earnings statements > Earnings



b. Double-click the earnings statement for Kevin Cook.

2. Create a new earnings statement line for the work Kevin performed

in the Wilmington office.

a. In the Earnings statement lines pane, click Add line.

b. In the Tax region column for the new earnings line, select DE –

Wilmington.

c. In the Earning code column, select Regular.

d. In the Quantity column, enter "40.000."

3. Release the regular salary earning lines.

a. In the Earnings statement lines pane, select the check boxes

next to the two regular salary earnings statement lines (Earning

code: Regular).

b. In the Earnings statement lines pane, click Release lines for

payment to release only the selected line for payment.

Kevin's bonus earnings remain on hold.


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Exercise 4: Release Earnings For Payment

Exercise Scenario

Now that all the necessary updates are made, and the statements on hold are

released, Claire will release the rest of the earnings for both the biweekly and

semimonthly pay cycles.

High Level Steps

1. Run the Release earnings statements process for the semimonthly

pay cycle.

2. Run the Release earnings statements process for the biweekly pay

cycle.

Detailed Steps

1. Run the Release earnings statements process for the semimonthly

pay cycle.





6/30/2013.

d. Click OK.

e. Review the message that is displayed and then click Close.

2. Run the Release earnings statements process for the biweekly pay

cycle.





6/23/2013.

d. Click OK.

e. Review the Infolog message that is displayed and then click

Close.

f. Click Payroll > Common > Earnings statements > Released

earnings statements to open a list page that displays all release

earnings statements.


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Generate Pay Statements

Pay statements are generated for the pay cycle, pay period, and payment run

type that you specify. The process automatically collects all released earnings that

fit the specified criteria.

Before you can generate a pay statement, you must generate and release the

earnings for the pay cycle and the pay period. When you generate pay

statements, all worker deductions and employer contributions for benefits and

taxes are calculated, and the worker’s net pay is determined.

Completed pay statements are used to issue worker payments.

Demonstration: Generate a Pay Statement From an

Earnings Statement

This demonstration shows how to generate a pay statement directly from the

released earnings on an earnings statement.

Demonstration Steps

1. Open a released earnings statement.

a. Click Payroll > Common > Earnings statements > Released

earnings statement.

b. Select the earnings statement for which to create a pay

statement.

c. Click Pay statement in the Process group of the Action Pane.

2. Generate the pay statement.

a. If you are generating a pay statement that must be paid on a day

other than the default payment date for the pay period, select

the date in the Payment date field.

b. Select the type of payment run to generate in the Payment run

type field.

c. Click OK.

Demonstration: Generate the Worker's Pay Statement

This demonstration shows how to generate a single pay statement from the

released earnings for a single worker.

You must know the worker's pay cycle before you can generate a pay statement

from the Worker form.


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Demonstration Steps

1. Open the Generate pay statements dialog box for a worker.


b. Double-click the worker record for which to generate a pay

statement.

c. On the Payroll tab of the Action pane, click Pay statement in

the Generate group.

2. Generate the pay statement.

a. In the Pay cycle field, select the pay cycle for which to generate

the pay statement.

b. In the Pay period field, select the pay period for which the

payment will be.

c. In the Payment date field, select a new payment date if it differs

from the pay period's default date.

d. Select the Payment run type.

e. Click OK.

Demonstration: Generate Pay Statements For a Pay Cycle

This demonstration shows how to generate pay statements for all released

earnings in the pay cycle and the pay period that you specify.

Demonstration Steps

Run the Generate pay statements process.

1. Click Payroll > Periodic > Pay statement processing > Generate

pay statements.

2. In the Pay cycle field, select the pay cycle for which to generate pay

statements.

3. In the Pay period field, select the pay period to process.

4. If you are generating pay statements that must be paid on a day

other than the default payment date for the pay period, select the

date in the Payment date field.

5. In the Payment run type field, select the type of payroll run you are

processing.

6. Click OK.


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Lab C: Generate Pay Statements

Scenario

Mia has finished updating and releasing the earnings statements for the two pay

periods she is currently working with. Now, she can start to create the pay

statements for the released earnings in the earnings statements.

Lab Setup


this module.

Exercise 1: Generate a Pay Statement From an Earnings

Statement

Exercise Scenario

Create a one-off pay statement for the released earnings in Brooke Drynan's

earnings statement for the pay period that ends on 6/23/2013.

High Level Steps

1. Generate a single pay statement from Brooke's earnings statement

for the pay period that ends on 6/23/2013.

Detailed Steps

1. Generate a single pay statement from Brooke's earnings statement

for the pay period that ends on 6/23/2013.

a. Click Payroll > Common > Earnings statements > Released

earnings statements.

b. Double-click the earnings statement for Brooke Drynan.

c. Review the earnings statement lines.

d. Click Pay statement in the Process group of the Action Pane.

e. Click OK.

f. Click Close to dismiss the Infolog message that appears.

Exercise 2: Generate the Pay Statement For a Single

Worker

Exercise Scenario

Kevin Cook's most recent earnings statement included earnings from two tax

regions. Mia wants to make sure that the taxes calculated correctly. Therefore,

she decides to create a single pay statement from the released earnings for the

pay period that ends on 6/30/2013. Kevin's position is in the semimonthly pay

cycle.


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High Level Steps

1. Open Kevin's worker record.

2. Create a pay statement for Kevin.

Detailed Steps

1. Open Kevin's worker record.


b. Double-click Kevin Cook's worker record.

c. On the Worker form, open the Payroll tab on the Action Pane.

d. Click Pay statement in the Generate group of the Action Pane.

2. Create a pay statement for Kevin.

a. In the Pay cycle field, select the semimonthly pay cycle.

b. In the Pay period field, select the pay period that ends on

6/30/2013.

c. In the Payment run type field, select Primary.

d. Click OK.


Exercise 3: Generate Pay Statements for Two Pay Cycles

Exercise Scenario

Mia must create the rest of the pay statements for the biweekly and semimonthly

pay cycles. She will generate them in two separate steps by using the Generate

pay statements form. Mia is only generating pay statements for the worker's

regular wages. Therefore, she will select the Primary payment run type.

Generate pay statements for the following pay cycles:

Biweekly pay cycle for the pay period that ends on 6/23/2013.

Semimonthly pay cycle for the pay period that ends on 6/30/2013.

High Level Steps

1. Generate the pay statements for the semimonthly pay cycle.

2. Generate the pay statements for the biweekly pay cycle.

Detailed Steps

1. Generate the pay statements for the semimonthly pay cycle.

a. Click Payroll > Periodic > Pay statement processing >

Generate pay statements.



6/30/2013.

d. In the Payment run type field, select Primary.


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e. Click OK.


2. Generate the pay statements for the biweekly pay cycle.


Generate pay statements.



6/23/2013.

d. In the Payment run type field, select Primary.

e. Click OK.


Work With Pay Statements

The pay statement is generated from earnings on the worker's earnings

statement, enrolled benefits and deductions, tax regions, and benefit accrual

transactions. The pay statement provides a complete depiction of the net

payment amounts, benefit costs and contributions, and the taxes that are

withheld from the payment.

Pay Statement Form

You can use the Pay statement form to maintain worker pay statements in

payroll.

The form consists of four pages—one page each for earnings, benefits, taxes, and

benefit accruals. The header on each page displays information about the pay

statement.

The buttons and fields on the Pay statement form are described in the following

tables.


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Action Pane Controls

Button Definition

Edit

Delete

Modify or delete a pay statement.

If a pay statement is changed, it must be

recalculated before it can be submitted for

payment.

If the pay statement is already posted or it is

submitted for payment, or if the payment is

already issued, then you must reverse the pay

statement instead of deleting it.

When you delete a pay statement, the following

actions occur:

The earnings statement lines are not deleted.

They can be included when you generate a new

pay statement.

Any arrearages that are created by the pay

statement are deleted. If an amount in arrears is

partly or fully recovered by a later pay statement,

the pay statements that recovered the amount

must be deleted before the pay statement that

created the arrearage can be deleted.

Reverse

Reverse a pay statement. This creates a reversing pay

statement that has amounts that are the opposite of

the amounts in the original pay statement.

Neither the original pay statement nor the reversing

pay statement can be modified or deleted.

Arrearage amounts are not reversed when you

reverse a pay statement. If arrearages are created or

recovered on the pay statement that you reverse, you

must manually adjust the worker’s arrearage balance

on the Worker arrears form. If an arrearage is

created, the arrearage amount is in the Arrears

FactBox. To determine whether an arrearage is

recovered, use the Worker arrears form.

Note: A pay statement can only be reversed

after it is submitted for payment or it is posted to the

general ledger. Therefore, there are important steps

that you must take both before and after you reverse

the pay statement. Pay statement reversals are

discussed in the "Working With Issued Pay

Statements" lesson later in this module.


7 - 39

Button Definition

Submit for payment

Submit the pay statement to create a payment

journal so that the payment can be generated for the

worker.

To post the pay statement the same time that you

submit it for payment, select the Post the selected

pay statement check box.

Note: This button is unavailable when the pay

statement must be recalculated, when the payment is

submitted for payment, or when the payment is

issued to the worker. It is also unavailable at any

stage of the process for pay statements that are

created by using a Manual payment run type with

the Disable accounting check box selected.

Submit to reissue

Submit the pay statement to create a payment

journal so that a payment can be reissued. This is

used when the payment to the worker is issued

correctly, and the funds are not received by the

worker, usually because of a lost or damaged check.

For more information about reissuing a lost check

payment, refer to the "Working With Issued Pay

Statements" lesson later in this module.

Note: This button is available only after the

payment is issued to the worker. It is unavailable at

any stage of the process for pay statements that are

created by using a Manual payment run type with

the Disable accounting check box selected. It is also

unavailable for pay statements that are reversed.

Pay statements Print the pay statement.

This button is available only after the payment is

issued to the worker. You can print the pay statement

as many times as is necessary.


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Action Pane: Financials Tab

Button Definition

Post

Post the pay statement to the general ledger.

This enters the pay statement earnings,

benefits, and taxes into the general ledger.

To submit the pay statement for payment the

same time that you post it, select the Submit

for payment after posting check box.

This button is unavailable when the pay

statement must be recalculated or when the

payment is posted.

View distributions

View the accounting distributions of all lines

on the pay statement.

Subledger journal entries

Open the Subledger journal form. Here, you

can view the subledger journal lines for the

selected pay statement.

Change accounting dates

Change all the accounting dates on a pay

statement to a new date.

When you reverse a pay statement, the

accounting date of the reversing pay

statement is the same as the accounting date

of the original pay statement. If the pay

statement is reversed after the fiscal period is

closed, the accounting date on the reversing

pay statement must be changed so that it can

be posted.

Perform budget checking

Budget check errors or

warnings

When Budget checking for pay statements is

enabled, perform budget checking for the

selected pay statement, or open a form to

view the budget check errors or warnings for

the selected pay statement.


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Pay Statement Header

Field Definitions

Payment date

The date when the payment is scheduled to be

issued to the worker. The default date for this is

set for each pay period on the Pay cycles and

pay periods form.

Disbursement format

Workers can be paid by check or by an

electronic payment.

Pay cycle

The pay cycle that includes the pay period that

the pay statement covers.

All positions for the worker that have the same

pay cycle and are paid by the same legal entity

are processed into a single payment when they

are processed from the Periodic menu or from

the Worker form or the list page. However,

when the payment generation is run from the

Position form or the list page, only the earnings

and benefits that apply to the selected position

are processed.

Pay period The pay period that the pay statement covers.

Personnel number

The personnel number of the worker that the

pay statement is for.

Pay statement number

The pay statement number is determined by the

number sequence that is assigned to the pay

statement.

Batch number

The batch number is assigned to the pay

statement generation run that created the pay

statement.


7 - 42

Field Definitions

Payment run type

There are four payment run types. Each

earning code specifies the payment run

types that the associated earnings can be

included in.

Primary – The primary payment is the

regular payment made for the pay period. A

single worker and, or position combination

can have only one primary payment for

each pay period.

Additional – This payment run type is used

to process additional payments, such as

bonuses, commissions, payouts, termination

pay, or corrections.

Gross up – This payment run type is used

when the employer decides to pay all the

payroll taxes on behalf of the worker. The

payment of the taxes is treated as additional

taxable wages to the employee.

Manual – This payment run type is used

when the worker is paid and taxes are

withheld outside the payroll system. For

example, this is used when an employee

vests stock shares and a certain amount of

shares are withheld to cover the taxes

involved. The manual payment run collects

the data that is required to create accurate

pay statements and Form W-2s.

Benefit accrual calculations are not

performed for manual payment runs.

Manual payment runs are not submitted for

payment.

Certain pay statement fields that cannot be

modified for pay statements that are

generated by other payment run types can

be modified for pay statements that are

generated by manual payment runs.


7 - 43

Earnings Page

The Earnings page contains the worker's earnings lines.

Earnings lines cannot be added to a pay statement.

Earnings lines can be removed from a pay statement. The earning

lines that you remove are not deleted from the payroll system. They

can be included in a future pay statement.

Earnings lines that are on a pay statement cannot be modified.

Buttons

Button Description

Remove If you remove an earning line, you must

recalculate the pay statement before you

can submit it for payment or post it to the

general ledger.

At least one earning line must remain on

the pay statement. If you want to remove all

the earning lines, then you must delete the

pay statement instead.

View distributed amounts Open the Accounting distributions form.

Here, you can view distribution amounts for

the selected earning line.

To change the accounting distributions, you

must first remove the pay statement

earning line or delete the pay statement.

After you do this, you can change the

distribution amounts on the earning

statement line.

Budget Open a menu that contains the

following items:

Perform budget checking - Perform a

budget check for the selected pay

statement line.

Budget check errors or warnings -

Open a form where you can view the

results of the budget check for the

selected pay statement line.


7 - 44

Fields

Column heading Description

Budget check results The budget check results for the pay

statement.

A red X indicates that the budget check

failed. A yellow triangle indicates that the

budget check passed with warnings, and a

green check mark indicates that the budget

check passed. This field is blank if the

budget checking is not performed.

Date The accounting date of the earning line.

Earning code

Description

The earning code for the earning line.

Position

All positions for the worker that have the

same pay cycle and that are paid by the

same legal entity are processed into a single

payment when they are processed from the

main menu or from the worker. However,

when the payment generation is run for a

specific position, only the earnings and

benefits that apply to the selected position

are processed.

A single worker/position combination can

have only one primary payment for each

pay period.

Quantity

Rate

The units worked or produced, and the

amount earned for each unit worked or

produced. These two values are multiplied

to determine the worker’s pay for the pay

statement earning line.

Amount The worker’s pay for the pay statement line.

Benefit Calculations Page

The Benefit calculations page contains two grid areas:

Benefit deductions – The amounts deducted from the worker's

earnings for each benefit the worker is enrolled in.

Benefit contributions – The amounts that the legal entity that pays

the position pays for the worker's benefits.


7 - 45

Benefit Deductions Fields

The deduction calculations for the benefits that are included on this pay

statement are shown in the following table.


Budget check results

The budget check results for the pay

statement benefit line.







Unlabeled column

If the unlabeled column contains a circle

with a red slash, the benefit line cannot be

changed. If the column contains a pencil

icon, then a user has changed the benefit

line.

Benefit lines that are generated by the

system can be modified only if the benefit

plan is set to allow benefit lines to be

modified.

Benefit

Description

The benefit that the worker deduction is

made for.

Position

The position that is held by the worker and

that offers the benefit.

Deduction amount

The amount that is deducted from the

worker’s gross pay to pay for the benefit.

Deduction amounts for the worker are set

up on the Maintain benefits form.

Included in invoice

If a check mark appears in this column, then

the line amount is included in a vendor

invoice.


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Benefit Contributions Fields

The contribution calculations for the benefits that are included on this pay




statement benefit line.







Unlabeled column

If the unlabeled column contains a circle

with a red slash, the benefit line cannot be


icon, then a user has changed the benefit

line.

Benefit lines that are generated by the

system can be modified only if the benefit

plan is set to allow benefit lines to be

modified.

Benefit

Description

The benefit that the employer contribution

is made for.

Position The position that is held by the worker and

that offers the benefit.

Contribution amount The amount that the employer contributes

for the benefit.

Contribution amounts for the worker are set

up on the Maintain benefits form.

Included in invoice



invoice.

Tax Calculations Page

The Tax calculations page contains two grid areas:

Tax deductions – The taxes deducted from the worker's earnings.

Tax contributions – The taxes that the legal entity pays for the

position.


7 - 47

Tax Deductions Fields

The deduction calculations for the taxes that are included on this pay statement

are shown in the following table.

Column headings Definition


statement tax line.







Unlabeled column If the unlabeled column contains a circle

with a red slash, the tax line cannot be


icon, then a user has changed the tax line.

Only Medicare and FICA tax lines cannot be

changed.

Tax code

Description

The tax that the worker deduction is made

for.

Position The position that the tax is required for.

Deduction amount The amount that is deducted from the

worker’s gross pay to pay the tax.

Included in invoice



invoice.


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Tax Contributions Fields

The contribution calculations for the taxes that are included on this pay


Column headings Definition


statement tax line.







Unlabeled column If the unlabeled column contains a circle

with a red slash, the tax line cannot be


icon, then a user has changed the tax line.

Only Medicare and FICA tax lines cannot be

changed.

Tax code

Description

The tax that the employer payment is made

for.

Position The position that the tax is required for.

Contribution amount The tax amount that the employer pays.

Included in invoice



invoice.

Benefit Accrual Calculations Fields

View information about benefit accrual plans, such as vacation or sick time. The

benefit accrual grid is empty until you submit the pay statement.

Note: You cannot change benefit accrual lines on the pay statement. If you

must make a change, then you must adjust the worker balances by using the

Benefit accruals form.


7 - 49


Benefit accrual plan The benefit accrual plans that the worker is

enrolled in.

Note: If both the Stop accrual and

the Stop balance reduction check boxes

are selected on the Benefit accruals form

for a plan that the worker is enrolled in,

that plan will not appear on the pay

statement.

Amount accrued The amount that is added to the balance in

the plan in this pay statement.

Amount used

The amount that the worker used from the

plan in this pay statement.

Plan year accrued

The amount that is added to the worker’s

balance in the plan since the start of the

current plan year.

Plan year used

The amount that the worker has used from

the plan since the start of the current plan

year.

Available

The balance that is available for the worker

to use.

Note: The balance that is displayed in

a pay statement is calculated at the time

that the pay statement is submitted for

payment. The amount is not recalculated if

you reprint the pay statement later. It

remains unchanged over time so that the

history is visible. To view the latest available

plan balance, use either the Benefit

accrual balances form or the Benefit

accruals form for the worker.


7 - 50

Review the Pay Statement

Unlike the earnings statement, the pay statement includes all earnings, benefit,

deduction, and tax amounts. The Pay statement form also displays the

company's financial contributions in the form of taxes and benefit contributions.

Pay Statement List Pages

Microsoft Dynamics AX includes five pay statement-related list pages. Each filters

the displayed statements based on the pay statements current state.

List page Description

All pay statements All pay statements, regardless of status.

Calculated pay statements Pay statements that are ready to be

submitted for payment.

Pay statements to recalculate Pay statements that must be

recalculated before they can be

submitted.

Submitted pay statements Pay statements that are submitted for

payment.

Issued pay statements Pay statements that are paid.

You can use the FactBoxes on the right side of each list page to review earnings,

tax, and benefit totals for the select pay statement.

Pay Statement Reports

Click Payroll > Reports to find reports for pay statements, worker payments,

benefits, and taxes.

For more information about Payroll reports, refer to the "Reports and Inquiries"

module later in this course.

Modify Earning Lines On a Pay Statement

Earning lines are maintained in the Earnings statement form. Although you can

remove earning lines from a pay statement, you cannot add or modify earning

lines. To add or modify earning lines, you must first delete the pay statement,

modify the earnings on the earnings statement, and then generate a new pay

statement.


7 - 51

Demonstration: Modify Benefit and Tax Lines on Pay

Statements

You can add or remove benefit lines from the pay statement. If you add a benefit

line, you can also modify the benefit line. Benefit lines that are automatically

created can be modified if the benefit plan is not locked for pay statements. Tax

lines, except Medicare and FICA tax lines, can be added, removed, or modified.

Benefit and tax lines that cannot be modified are marked with a red circle with a

line through the circle. Benefit lines that you have already modified are marked

with a pencil icon.

FIGURE 7.2:EDITED BENEFITS LINES ON A PAY STATEMENT

After you make a change to the taxes or the benefits on the pay statement, you

must recalculate the pay statement.

FIGURE 7.3:THE RECALCULATE BUTTON IN THE FORM'S MESSAGE BAR

This demonstration shows how to modify the benefit and tax lines on a pay

statement.

Demonstration Steps

1. Open the Benefit calculations page.

a. Click Payroll > Common > Pay statements > Calculated pay

statements.

b. Double-click the pay statement to modify. For example, open

Phyllis Harris' pay statement for the pay period that ends on

6/30/2013.

c. Click Edit.

d. Click the Benefit calculations link and make any necessary

changes to the benefit lines.

2. Open the Tax calculations page.

a. Click the Tax calculations link and make any necessary changes

to the tax lines.

b. In the message bar, click Recalculate.


7 - 52

Lab D: Working With Pay Statements

Scenario

Now that all the pay statements are created for the two pay cycles that Mia is

currently working with, she must incorporate any last-minute changes and make

sure that the statements are ready to be submitted for payment.

Lab Setup


this module.

Exercise 1: Change Earnings Lines on a Pay Statement

Exercise Scenario

Mia just learned that Jacob Robinson had to take a sick day on 6/21/2013. Mia

has already created a pay statement for Jacob in that pay period. However, she

must add the Sick earnings line before payment can be issued. Mia cannot add

the earnings to the pay statement. Therefore, she must delete Jacob's current pay

statement and then add the Sick earnings line to the earnings statement for the

6/10/2013–6/23/2013 pay period.

Add eight hours of Sick earnings to Jacob's earnings statement, and then create a

new pay statement so that Jacob can be paid on the default payment date.

High Level Steps

1. Delete the pay statement.

2. Change the earnings lines on the earnings statement.

3. Generate a single pay statement for Jacob.

Detailed Steps

1. Delete the pay statement.

a. Click Payroll > Common > Pay statements > All pay

statements.

b. Double-click the pay statement for Jacob Robinson.

c. Review the Earning lines pane to check for any Sick earnings.

d. Click Delete in the Maintain group of the Action Pane.

e. Click Yes to confirm the pay statement deletion.

f. Click Close.


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2. Change the earnings lines on the earnings statement.


statements.

b. Double-click Jacob Robinson's earnings statement for the pay

period ending on 6/23/2013.

c. In the Earnings statement lines pane, select the line for

6/21/2013.

d. Click Remove.

e. Click Yes to confirm that you are deleting a record.

f. Click Add line.

g. In the Earnings date column for the new line, enter "6/21/2013".

h. In the Earning code column, select Sick.

i. In the Quantity column, enter "8.0000".

j. Select the new earnings statement line that you entered.

k. Click Release lines for payment.

3. Generate a single pay statement for Jacob.

a. Click Pay statement in the Process group of the Action Pane.

b. On the Generate pay statements dialog box, click OK.

c. Click Close to dismiss the Infolog message.

d. Expand the Pay statements FactBox on the right side of the

form.

e. Click the pay statement number for the pay statement that you

just generated.

f. Review the earning lines in the Earnings pane of the Pay

statement form.

Exercise 2: Review Pending Payments

Exercise Scenario

Claire, the Payroll Manager, wants to review a report of pending payments for the

biweekly pay cycle employees for the pay period ending 6/23/2013. Generate the

Worker payment register report for that period.

High Level Steps

1. Run the Worker payment register report.


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Detailed Steps

1. Run the Worker payment register report.

a. Click Payroll > Reports > Worker payment register.

b. On the Worker payment register report parameters form, select

the biweekly pay cycle in the Pay cycle field.

c. In the From pay period field, select the pay period that ends on

6/23/2013.

d. In the To pay period field, select the pay period that ends on

6/23/2013.

e. Click OK.

Issue Worker Payments

You can pay workers by check or by electronic payment. When you submit pay

statements, an invoice is created and posted for the sum of the worker’s net pay

for the vendor. A payment journal with lines is created. Now, you can generate

and post payments. Additionally, you can optionally post the payroll costs that

are associated with workers to the general journal when you submit payments.

Submit Pay Statements

When you submit pay statements, this creates and posts a vendor invoice for the

net pay of the pay statements. A payment journal with voucher lines is also

created so that you can generate and post the payments. The vendor invoice is

created for the generic payroll vendor that is specified on the Payroll

parameters form, in the Vendor account for worker payments field.

Submitting a pay statement also creates the worker's benefit accruals and records

any used benefit accrual hours.

Best Practice: You can submit only pay statements that are completely

calculated. If you modified a pay statement, for example, to change a benefit

amount, the statement must be recalculated before it can be submitted. Before you

submit pay statements, view the Pay statements to recalculate list page to verify

that there are no pay statements to recalculate.

To submit several pay statements at the same time, you can use the Submit pay

statements form, or you can submit a single pay statement directly from the

Action Pane on the Pay statement form or from one of the Pay statements list

pages. Typically, when you submit a single pay statement it is frequently used to

pay a bonus or gross up payment for a single worker. When you submit a single

pay statement, you have the option to post the pay statement to the general

ledger. For more information about posting pay statements, refer to the "Posting

Payroll and Generating Vendor Invoices" lesson later in this module.


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Demonstration: Submit Pay Statements

This demonstration shows how to submit all available pay statements in a single

pay cycle.

Demonstration Steps

1. Submit a set of pay statements.

a. Click Payroll > Periodic > Pay statement processing > Submit

pay statements.

b. In the Pay cycle field, select a pay cycle that contains pay

statements that are ready to be paid. For example, select the

semimonthly pay cycle.

c. In the Pay period field, select a pay period that contains pay

statements that are ready to be paid. For example, select the pay

period that ends on 6/30/2013.

The pay periods that are displayed are available for the pay cycle.

The default pay period is the first open pay period. However, you

can select any open pay periods from the list.

d. Click OK to submit the pay statements.

A message displays that indicates that the payment journal is

generated successfully and that a voucher and invoice details are

created.

2. Review the submitted pay statements.

a. Click Payroll > Common > Pay statements > Submitted pay

statements.

A list of submitted statements displays and an icon appears in

the first column of the Pay statement grid to indicate that the

payment is submitted.

Generate Payments

After you submit the pay statements and generate the payment journal, you can

generate the checks and electronic payments for the workers that you are paying.

To generate the payments, you must open the payment journal and generate the

payments for each voucher line that the payment journal contains.

Best Practice: Review how many vouchers are created. There will be one

journal voucher line for each check for every statement and one or more journal

voucher lines for each electronic pay statement. Electronic payments can be

distributed among multiple bank accounts. Therefore, there will be one voucher line

for each account.


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You must generate payments for checks and electronic payments separately.

After payments are successfully generated, the payment status for each voucher

line is set to Sent.

Demonstration: Generate Payments

This demonstration shows how to generate both check and electronic payments

from the payment journal.

You must have completed the previous labs to perform this demonstration.

Demonstration Steps

1. Open the journal voucher for the payment journal.


Payment journal.

b. Select Payment journal and then click Lines in the Action Pane

Strip to view the Journal voucher.

c. Validate that the number of vouchers is correct. There will be one

journal voucher line for each check pay statement and one or

more journal voucher lines for each electronic pay statement.

2. Generate the check payments.

a. From the Functions menu, select Generate payments.

b. In the Generate payments form, select PAYROLL_CK in the

Method of payment field.

c. Select the Bank account to make the payments from.

d. Click OK to generate the payment for the records that match the

method of payment and the bank account.

The Payroll check payment form will open.

e. Verify the starting check number in the From field.

f. Click OK to print the checks.

3. Generate the electronic payments.


b. In the Generate payments form, select PAYROLL_EL in the

Method of payment field.

c. Select the Bank account to make the payments from.

d. Click OK to generate the payments. The Payroll electronic

(Direct deposit) form will open

e. In the File name field, enter the file name and the path for where

you want the ACH file to be created.

f. Enter an Effective date.

g. Click Pay statement to select the printing destination.


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h. Optionally, select the Pay statement check box to print the pay

statements.

i. Click OK to create the ACH file.

j. Close the Journal voucher form.

Post The Payment Journal

The final step to issue worker payments is to post the payment journal. When you

post the journal, it settles the journal lines to the vendor invoice that is created

and posted when you submitted the pay statements for payment. You post the

journal lines from the journal voucher.

Demonstration: Post the Payment Journal to the General

Ledger

This demonstration shows how to post a payment journal.

Demonstration Steps

1. Post the journal lines from the payment journal.


Payment journal.

b. Select the payment journal, and then click Lines in the Action

Pane Strip to view the Journal voucher.

c. From the Post menu, select Post.

A message displays that indicates how many vouchers posted.


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Lab E: Issue Worker Payments

Scenario

Mia has prepared the earnings for the two pay cycles that she has been working

on. She now must submit the pay statements and issue check and electronic

payments to the workers.

Lab Setup


this module.

Exercise 1: Submit Pay Statements

Exercise Scenario

The pay statements for both the biweekly and semimonthly pay cycles are ready

to be paid. First, Mia must submit both sets of pay statements by using the

Submit pay statements form.

Submit the pay statements for the following pay cycles:

Biweekly pay cycle for the pay period that ends 6/23/2013.

Semimonthly pay cycle for the pay period that ends 6/30/2013.

After the process is complete, view the Submitted pay statements list page to

review the pay statements that are submitted.

High Level Steps

1. Submit the biweekly pay statements for payment.

2. Submit the semimonthly pay statements for payment.


Detailed Steps

1. Submit the biweekly pay statements for payment.


pay statements.



6/23/2013.

d. Click OK.

e. Note the journal batch number in the Infolog message, and then

click Close.


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2. Submit the semimonthly pay statements for payment.


pay statements.



6/30/2013.

d. Click OK.

e. Note the journal batch number in the Infolog message, and then

click Close.


a. Click Payroll > Common > Pay statements > Submitted pay

statements.

Exercise 2: Generate Checks and Electronic Payments

Exercise Scenario

After the pay statements are submitted, Mia must generate the worker's

payments. She must generate payments twice—once for checks and once for

electronic transfers.

High Level Steps

1. Open the payment journal.



4. Generate the check and electronic payments for semimonthly pay

cycle.

Detailed Steps

1. Open the payment journal.


Payment journal.

b. On the Payment journal form, select the payment journal that is

created for the biweekly pay cycle.

c. Click Lines in the Action Pane Strip.

d. On the Journal voucher form, review the voucher lines.



b. On the Generate payments dialog box, generate the check

payments.

i. In the Method of payment field, select PAYROLL_CK.

ii. In the Bank account field, select USMF PAYRL.


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c. Click OK.

d. On the Payroll check payment dialog box, click OK.



b. On the Generate payments dialog box, generate the electronic

payments.

i. In the Method of payment field, select PAYROLL_EL.

ii. In the Bank account field, select USMF PAYRL.

iii. Click OK.

c. On the Payroll electronic NACHA PPD dialog box, enter the

electronic payment file details.

i. In the File name field enter

"C:\Users\Administrator\Desktop\2013623_BW_ACH.txt."

ii. In the Effective date field, enter "6/28/2013."

iii. Select the Pay statement check box.

iv. Click OK.

d. Review the Infolog message, and then click Close.

e. Review the Pay statements report, and then click Close.

4. Generate the check and electronic payments for semimonthly pay

cycle.

a. Repeat steps 1 through 3 for the payment journal that was

created for the semimonthly pay cycle.

Note: For step 10a, in the File name field, enter

"C:\Users\Administrator\Desktop\2013623_SM_ACH.txt."

For step 10b, enter "6/30/2013" in the Effective date field.


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Exercise 3: Post the Payment Journal

Exercise Scenario

To settle the vendor invoice that was created for the worker payments, Mia must

post the payment journal.

High Level Steps

1. Post the payment journal.

Detailed Steps

1. Post the payment journal.


Payment journal.

b. On the Payment journal form, select the payment journal that is

created for the biweekly pay cycle.


d. From the Post menu, select Post.

e. Review how many vouchers are posted, and then click Close.

Exercise 4: Reprint a Single Pay Statement

Exercise Scenario

Jacob Robinson's manager requested a copy of Jacob's most recent pay

statement. Mia can print the pay statement from the Pay statements form.

Print the pay statement for Jacob Robinson that is scheduled to be paid on

6/28/2013.

High Level Steps

1. Print the pay statement to the screen.

Detailed Steps

1. Print the pay statement to the screen.

a. Click Payroll > Common > Pay statements > Issued pay

statements.

b. Select the pay statement for Jacob Robinson with the 6/28/2013

payment date.

c. Click Pay statements in the Print group of the Action Pane.

d. Click Destinations.

e. Select the Screen option on the left side of the Print destination

settings dialog box.

f. Click OK.

g. Click OK again.


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Post Payroll and Generate Vendor Invoices for Benefits

and Taxes

In the final steps of the payroll process, you post the payroll to the general ledger

and then you generate vendor invoices to pay benefit providers, tax authorities,

and so on.

To account for all the transactions that affect the general ledger, you post the pay

statements for a pay period.

Post Payroll to the General Ledger

To post a payroll run to the general ledger, you post the pay statements for a pay

period. When you post payroll, the accounting distributions that are specified on

each pay statement line determine the correct offset accounts to use. When each

line has a balanced transaction, all transactions for the pay statement can be

entered in the general ledger.

Note: Offset accounts are determined by the posting definitions that are

assigned to pay statements in the Transaction posting definitions form.

Similarly, when you post multiple pay statements and one fails, the selected pay

statements will not post.

Demonstration: Post a Pay Statement for a Single Worker

This demonstration shows how to post a pay statement from the All pay

statements list page and how to submit it for payment. The same posting steps

can be used on the Pay statement form.

Demonstration Steps

1. Post a single pay statement.

a. Click Payroll > Common > Pay statements > All pay

statements.

b. Select the pay statement for the specific worker and pay period.

c. Click the Financials tab.

d. In the Accounting group, click Post.

e. Select the Submit for payment after posting check box.

f. Click Post in the Post the selected pay statement form.

A message displays that indicates that the pay statement posted

successfully.


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Demonstration: Post All Pay Statements in a Pay Period

This demonstration shows how to run the Post pay statements process and how

to post all pay statements for a selected pay cycle and pay period.

Demonstration Steps

1. Run the Post pay statements process.

a. Click Payroll > Periodic > Pay statement processing > Post

pay statements.

b. In the Pay cycle field, select the pay cycle for which to post pay

statements.

c. In the Pay period field, select the pay period for which to post

pay statements. The pay periods that are displayed are available

for the pay cycle. The default pay period is the first open pay

period. However, you can select any open pay periods from the

list.

d. Click OK.

Generate Vendor Invoices

After you post payroll, you should generate vendor invoices for the payables that

resulted from the pay period that you posted. The payables include payments to

benefits providers and the taxes that are paid to the applicable tax authorities.

The amounts from all the payments that are posted for the period are combined,

and the benefit and tax setup information is used to create an invoice for each

vendor. The totals and their corresponding accounting distributions from the

original pay statement lines are used to create the invoices.

You can select to process all the vendor invoices for a pay period at the same

time or you can generate invoices for a single vendor, tax code, or benefit plan.

After you generate the vendor invoices, you can pay the vendors through the

Accounts payable module.

Demonstration: Generate Vendor Invoices for Benefits and

Taxes

This demonstration shows how to generate all the vendor invoices for a pay cycle.

Demonstration Steps

1. Generate the vendor invoices for all benefit providers and tax

authorities.


Generate vendor invoices.

b. In the Pay cycle field, select the pay cycle for which to generate


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vendor invoices.

c. In the Pay period field, select the same Pay period for which you

posted the pay statements.

d. Select All invoices.

e. Click OK. You cannot delete or recalculate the invoices.

Demonstration: Generate Invoices for a Single Vendor

This demonstration shows how to generate vendor invoices for a single vendor,

such as a tax authority or a benefit provider. Vendor invoices are created for each

benefit plan or tax line in the pay period's pay statements.

Demonstration Steps

1. Generate the vendor invoice for a single benefit provider or tax

authority.



b. In the Pay cycle field, select the pay cycle for which to generate

vendor invoices.

c. In the Pay period field, select the pay period for which to post

pay statements. The pay periods that are displayed are available

for the pay cycle. The default pay period is the first open pay

period. However, you can select any open pay periods from the

list.

d. Select Vendor invoice and select the vendor to generate

invoices for from the list.

e. Click OK.

f. To verify that the vendor invoice is generated, double-click the

pay statement to open the Pay statement detail form. Verify

that the pay statement lines for the benefits that are associated

with the vendor have a check mark in the Included in invoice

column.


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Lab F: Post Payroll and Generate Vendor Invoices

Scenario

To complete the payroll for the biweekly pay cycle, Mia must perform several

more tasks. First, she will post all the pay statements for the pay period that ends

on 6/23/2013. Later, she will generate all the vendor invoices for the benefit and

tax payables that resulted from the payroll run.

Lab Setup


this module.

Exercise 1: Post the Pay Statements

Exercise Scenario

First, Mia must post the pay statements for the biweekly pay cycle. Post the pay

statements for the pay period that ends on 6/23/2013.

High Level Steps

1. Post the pay statements.

Detailed Steps

1. Post the pay statements.

a. Click Payroll > Periodic > Pay statement processing > Post

pay statements.



6/23/2013.

d. Click OK.


Exercise 2: Generate Vendor Invoices

Exercise Scenario

Next, Mia must generate all the vendor invoices that are required for the

payables from the pay period.


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High Level Steps

1. Run the Generate vendor invoices process.

Detailed Steps

1. Run the Generate vendor invoices process.





6/23/2013.

d. Select All invoices.

e. Click OK.

f. Review the vendor invoices that are listed in the Infolog message

that appears.

g. Click Close to dismiss the Infolog message.

Work With Issued Pay Statements

After you post the payroll to the general ledger and you pay all the benefit

providers and tax authorities, the payroll process is mostly completed.

Occasionally, you might have to perform non-regular tasks such as reissuing a

check payment or reprinting a pay statement.

To reissue a check payment, you must reverse the original check payment and

then submit the original pay statement for reissue.

Pay statements can be printed as many times as is necessary by using the Pay

statements report.

Demonstration: Print a Set of Pay Statements

This demonstration shows how to print pay statements for a selected pay cycle

and pay period.

Demonstration Steps

1. Run the Pay statements report.

a. Click Payroll > Reports > Pay statements.

b. In the Pay cycle field, select the pay cycle for the pay statements

to print. For example, select the biweekly pay cycle.

c. In the Pay period field, select the pay period for the pay

statements. For example, select the pay period that ends on

6/23/2013.

The pay periods that are displayed are available for the pay cycle.

d. Click OK.


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Demonstration: Reissue a Check Payment

This demonstration shows how to reissue a check payment for the worker after

the payment journal is posted. Typically, this process is used to replace a lost

check. The new check will have a different number than the original check that is

being replaced.

Demonstration Steps

1. Find the check payment number.


statements.

b. Select a pay statement that is associated with the check payment

you will reissue.

c. Expand the Payments FactBox on the right side of the form.

d. Note the Payment number. This is the check payment number.

2. Create a check payment reversal.

a. Click Cash and bank management > Common > Checks.

b. On the Checks form, select the check with the check number that

you found on the pay statement.

c. Click Payment reversal to open the Payment reversal form.

d. In the Reason code field, select a reason for reversing the

payment.

e. In the Journal name field, select CheckRev.

f. Click OK.

3. Post the check payment reversal.

a. Click Cash and bank management > Journals > Check

reversals.

b. Select the journal that contains the check payment reversal.


4. Submit the pay statement for reissue.


statements.

b. Select the pay statement for which you reversed the payment.

c. Click Submit to reissue in the Process group of the Action Pane.

d. Click Submit.


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5. Generate the new check payment.


Payment journal.

b. Select the payment journal that you just created.


d. From the Functions menu, select Generate payments to open

the Generate payments form.

e. In the Method of payment field, select PAYROLL_CK.

f. In the Bank account field, select USMF_PAYRL.

g. Click OK.

h. Click OK to close the Payroll check payment dialog box.


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Lab G: Reissue a Payment for a Lost Check

Scenario

Arnie Mondloch's check for the 6/10/2012–6/23/2012 pay period is lost in the

mail.

Mia must reissue the original check payment and generate a new check payment

from the payment journal.

Lab Setup


this module.

Exercise 1: Reissue the Check Payment

High Level Steps






Detailed Steps



statements.

b. Select the pay statement for Arnie Mondloch for the pay period

that ends on 6/23/2013.

c. Expand the Payments FactBox on the right-side of the form.

d. Note the Payment number. This is the check payment number.


a. Click Cash and bank management > Common > Checks.

b. On the Checks form, select the check with the check number that

you found on Arnie's pay statement.

c. Click Payment reversal to open the Payment reversal form.

d. In the Reason code field, select LOST.

e. In the Journal name field, select CheckRev.

f. Click OK.


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g. Note the journal number that is displayed in the Infolog message

that appears.

h. Click Close to dismiss the Infolog.


a. Click Cash and bank management > Journals > Check

reversals.

b. Select the journal that contains the check payment reversal.


d. Click Close to dismiss the Infolog message that appears.



statements.

b. Select the pay statement for Arnie Mondloch for the pay period

that ends on 6/23/2013.

c. Click Submit to reissue in the Process group of the Action Pane.

d. Click Submit.

e. Note the number for the payment journal that is displayed in the

Infolog message that appears.

f. Click Close to dismiss the Infolog message.



Payment journal.



d. From the Functions menu, select Generate payments to open


e. In the Method of payment field, select PAYROLL_CK.

f. In the Bank account field, select USMF PAYRL.

g. Click OK.

h. On the Payroll check payment dialog box, click OK.


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Lab H: Process a Gross Up Payment

Scenario

Occasionally, Mia must process special payroll payments that are not included in

the regular payroll runs, such as employee anniversary gifts.

Recently, Ken Ewert celebrated his tenth employment anniversary with Contoso

Entertainment System USA. Contoso's policy is to award employees a $500.00

USD bonus for their tenth anniversary. To make sure that he receives the full $500

USD, Contoso will issue the bonus as a gross up payment to effectively reimburse

Ken for the additional taxes he would have paid on the bonus.

Process the bonus payment for Ken. Make sure that you post the pay statement

and the payment journal.

Ken's position is in the semimonthly pay cycle. Process this special payroll in the

pay period that ends on 7/15/2013.

Task 1: Create The Earnings Statement And Generate a Pay Statement

High Level Steps

1. Release the relocation earnings statement line.

2. Generate a pay statement for the gross up earning.

3. Open the pay statement that you just created.

Detailed Steps

1. Release the relocation earnings statement line.


statements.


c. In the Worker field, select Ken Ewert.


e. In Pay period field, select the pay period that ends on

7/15/2013.

f. In the Note field, enter "Ken's Anniversary".

g. In the Earnings statement lines pane, select Anniversary award

in the Earning code column for the first line.

h. Click Release earnings statement in the Process group of the

Action Pane.

2. Generate a pay statement for the gross up earning.

a. Click Pay statement in the Process group of the Action Pane.

b. In the Payment date field, enter "7/15/2013".

c. In the Payment run type field, select Gross up.


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d. Click OK.

e. Click Close to dismiss the Infolog message.

3. Open the pay statement that you just created.

a. Click Refresh in the List group of the Action Pane.

b. Expand the Pay statements FactBox on the right side of the

form.

c. Click the pay statement number for the pay statement that you

just created.

Task 2: Submit the Pay Statement for Payment

High Level Steps

1. Submit and post the pay statement.

2. Generate the check payment.

3. Post the payment journal to the general ledger.

Detailed Steps

1. Submit and post the pay statement.

a. On the Pay statement form, review the Earning lines area for

Ken's pay statement.

b. Click Submit for payment in the Process group of the Action

Pane.

c. Select the Post the selected pay statement check box.

d. Click Submit.

e. On the Infolog that is displayed, note the number for the

payment journal that is created.

f. Click Close.

2. Generate the check payment.


Payment journal.



d. On the Journal voucher form, review the voucher line. The

journal amount should be $500.00 USD.

e. From the Functions menu, select Generate payments to open


f. In the Method of payment field, select PAYROLL_CK.

g. In the Bank account field, select USMF PAYRL.


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h. Click OK.

i. On the Payroll check payment dialog box, click OK.

j. Click Close to dismiss the Infolog message that is displayed.

3. Post the payment journal to the general ledger.

a. From the Post menu on the Journal voucher form, select Post.

b. Click Close on the Infolog message that is displayed.

c. Click Close on the Journal vouchers form.


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Module Review

The Payroll process is made up of a series of manual and automated tasks. The

automated tasks, such as generating earnings and calculating benefit and tax

amounts, reduce the chance of error for the person processing the payroll and

speeds the process. The manual tasks make sure that the preferred amount of

review and oversight is used before workers are paid. By completing these tasks

you can create the worker's earnings on an earnings statement, generate a pay

statement from the earnings, and issue a payment to the worker by his or her

preferred method of payment.

Now that you have completed a Payroll run for a set of workers, you can see the

importance of correctly setting up workers, positions, benefits, tax regions, and

schedules. Without a complete setup, the Payroll process will not function

correctly. However, if an organization makes the effort to set up their Payroll

process, the length of time between generating earnings and issuing payment

can be made very short.

In this module, you learned about the following concepts:

There are several methods for entering earnings on earnings

statements

You can modify a worker's earnings only on an earnings statement

You can hold earnings to prevent payment for incorrect earnings

You must release earnings to include the earnings on a pay

statement

There are several methods for generating one or many pay

statements

You can review and modify benefit and tax amounts on a pay

statement

To issue payments to workers, you must typically generate the check

and electronic payments separately

To account for the expenses that are incurred by your organization,

you must post the payroll to the general ledger


7 - 75

Test Your Knowledge


1. Benefit deduction and contribution calculations appear on which of the

following forms?

( ) Earnings statement

( ) Pay statement

( ) Generate earnings

( ) Earning codes

2. In what order must you enter earnings for a worker?

( ) Generate earnings for all workers in the pay period and then

manually enter the exceptions for individual workers.

( ) Manually enter sick and vacation time, then enter hourly wages, and

then generate earnings.

( ) Manually create an earnings statement for each worker that is

assigned to a position with the same pay period.

( ) All the above.

3. You can change earnings amounts directly on the pay statement.

( ) True

( ) False

4. At least one earnings statement line must be released before you can create

a pay statement from an earnings statement.

( ) True

( ) False

5. If you find an error in the earnings that are listed on a pay statement, you

must delete the earnings statement and generate the earnings again.

( ) True

( ) False


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6. Pay statements can be printed as many times as necessary after you issue

payments.

( ) True

( ) False


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1. Benefit deduction and contribution calculations appear on which of the

following forms?

( ) Earnings statement

(√) Pay statement

( ) Generate earnings

( ) Earning codes

2. In what order must you enter earnings for a worker?

( ) Generate earnings for all workers in the pay period and then

manually enter the exceptions for individual workers.

( ) Manually enter sick and vacation time, then enter hourly wages, and

then generate earnings.

( ) Manually create an earnings statement for each worker that is

assigned to a position with the same pay period.

(√) All the above.

3. You can change earnings amounts directly on the pay statement.

( ) True

(√) False

4. At least one earnings statement line must be released before you can create

a pay statement from an earnings statement.

(√) True

( ) False

5. If you find an error in the earnings that are listed on a pay statement, you

must delete the earnings statement and generate the earnings again.

( ) True

(√) False


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6. Pay statements can be printed as many times as necessary after you issue

payments.

(√) True

( ) False

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MODULE 8: REPORTS AND INQUIRIES

Module Overview

To help you analyze the payroll transactions and the information in the Payroll

module, you can use several inquiry forms and reports to review the payroll

information.

All reports and inquiries are available from the Payroll area page.

Objectives

The objectives are:

Use inquiries to view payroll information.

Print Payroll reports.


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Inquiries

Microsoft Dynamics AX includes nine inquiries that you can use to analyze

earnings, benefit deductions and contributions, and tax transactions.

Pay Statements

You can use the Pay statement earnings inquiry to review the earnings lines that

are included in a worker's pay statement. This inquiry is an easy way to review the

pay period earnings for multiple workers at the same time.

You can use the Pay statement benefit amounts inquiry to review the

calculated benefit deduction amounts for a worker on each pay statement. Each

benefit that the worker is enrolled in is listed separately. If a vendor invoice is

generated for the benefit provider, the invoice number is also listed.

Taxes

You can use the Tax transaction history summary inquiry to view a summary of

the taxes that are withheld for a worker on each pay statement. Click View pay

statement to display the pay statement that is associated with the selected line

in the grid area.

You can use the Tax transaction history detail inquiry to review all tax

transactions for the workers. Each tax transaction is displayed on a separate line

in the grid area. You can also use this inquiry to create a new tax transaction

when there is no tax amount withheld or when the tax amount is withheld

incorrectly. Click New on the inquiry's Action Pane Strip to create a new

transaction.

Module 8: Reports and Inquiries

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Form W-2 Box Adjustments

The Form W-2 box adjustments inquiry is unique in the Payroll module

because it only displays adjustments that you make from the inquiry. You can use

this inquiry form to change the amount that is reported in boxes 10 through 14

on a worker's Form W-2. You can enter positive or negative amounts to add or

subtract from the original calculated amount for the box.

Worker Arrears

To review the arrears amounts for workers whose deductions for benefits are in

arrears, you can use the Worker arrears inquiry form. This form lists the original

arrearage amount that is from the pay statement where the arrearage occurred

and the amount that remains. A second grid area on the form displays any

arrearage adjustments.


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Benefits and Benefit Accruals

You can use the Worker benefit and deduction setup inquiry to view the

benefit setup information for the:

Worker

Workers in a type of benefit

Workers that are enrolled in a specific benefit plan and option

You can also use this form to list the benefit information for the date that you

specify.

Benefit Accruals

You can use the Benefit accrual balances and Benefit accrual transactions

inquiries to analyze the current and past states of worker's accruals in the

organization's paid time off plans.

The Benefit accrual balances inquiry displays the worker's balance in all the

worker’s enrolled plans for the current plan year. The inquiry also displays the

hours that are:

Carried forward from the previous year

Accrued

Used to this point

Pending usage

Available for the rest of the plan year

The Benefit accrual transactions inquiry displays the transactions that add to or


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subtract from the worker's plan balance. This includes any adjustments that are

made during the year.

Demonstration: Adjusting a Form W-2 Box Amount

This demonstration shows how to use the Form W-2 box adjustments inquiry to

enter adjustments to the amounts report on a worker's Form W-2.

Demonstration Steps

1. Create the adjustment record.

a. Click Payroll > Inquiries > Form W-2 box adjustments.

b. Click New.

c. In the Worker fields, select the worker that you are making an

adjustment for.

d. In the Date field, enter a date to identify the reporting period

that you are making an adjustment in.

e. In the Form W-2 box number field, select the box that you are

adjusting.

In the Amount field, enter the amount to adjust the Form W-2 box by. You can

enter a positive or negative amount.

Reports

Microsoft Dynamics AX includes six payroll-related reports. The Reports section

of the Payroll area page also includes one form that is used to generate an

electronic file for Form W-2 reporting.

You can use the register-type reports to review worker payments, benefits, and

the taxes for all workers that are included in a payroll run for a specific pay

period. Additional reports are used to reconcile and create W-2 forms that are

used to report to the Internal Revenue Service (IRS).

Pay Statements

You can use the Pay statements report to print pay statements any time after

the payments are issued.

On the Report parameters form, you can select the pay cycle, pay period, and

the payment disbursement method to include in the report. You can also use the

Query form to filter the printed pay statements. For example, you can filter the

pay statements by worker, payment number, batch, and payment date.


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FIGURE 8.4:PAY STATEMENT REPORT

Benefit Register

You can print the Benefit register to view a list of the benefit deduction and

employer contribution amounts, the hours for the pay cycle and the pay period

that you specify. You can use this report to validate the benefit amounts that are

calculated during the payroll process.

To include the earnings hours and to report only amounts, select the Print

earning basis detail check box. For garnishments, you can include the associated

court case number by selecting the Print court case number check box.


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You can select to print the register in a summarized or detailed format by using

the Print in summary or detail field on the Report parameters form. The

summary version of the report lists deductions and employer contributions for

each benefit plan and option. The detailed version lists the deductions and

contributions for every worker that is enrolled in each benefit plan and option.

FIGURE 8.5:BENEFIT REGISTER

Worker Payment Register

You can print the Worker payment register to review the gross and net pay,

deductions, and contributions on each pay statement that is in the range of the

pay periods that you select. You can use this report to view payroll totals before

you issue payments for a pay period. If a check payment is issued from a pay

statement, the check number is also listed on the report.

Best Practice: You can use this payroll report each pay period to validate

data and to approve pay runs.


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FIGURE 8.6:WORKER PAYMENT REGISTER

Tax Reports

The Tax report group includes reports that are used to pay period tax calculations

and to print W-2 forms. Click Payroll > Reports > Tax to access the payroll tax

reports.

You can print the Tax register to validate the tax amounts that are calculated

during the payroll process.

Form W-2 Reports

Every organization must create a W-2 for each of its workers to report wages and

taxes that have been withheld. To support this IRS reporting requirement,

Microsoft Dynamics AX includes the three following reports:

Form W-2 reconciliation report to balance Form W-2s and validate

the amounts before you issue Form W-2s to the workers.

Form W-2 report to print the W-2 that you will issue to the worker.

You must print the report on specially formatted Form W-2 paper

before you issue the W-2 to the worker.

Electronic Form W-2 report to generate an electronic W-2 file to

submit to the IRS to report the worker’s wages and withholdings.


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Demonstration: Printing a Tax Register

This demonstration shows how to print a Tax register report.

Demonstration Steps

1. Open the Report parameters form and select the dates to report on.

a. Click Payroll > Reports > Tax > Tax register.

b. In the From field, select the start date in the range to report on.

c. In the To field, select the last date in the range.

d. Optionally, select the Print social security number check box to

print the worker's social security number on the report.

2. Optionally, select a specific tax code to report on and run the report.

a. In the Tax code area, click Select to open the query form.

b. Use the Criteria field to select a specific tax code to report on.

For example, select USA-WA-ER_SUTA to report only tax

transactions for the Washington State Unemployment Tax code.

c. Click OK to close the query form.

d. Click OK to run the report.


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Module Review

In this module, you learned how to use inquiries and reports to review and adjust

payroll information. When you print reports, this can help validate that the payroll

calculations are what you expect before you continue to process a payroll run.

You also learned how to generate the Form W-2s for the workers in the

organization. You can adjust Form W-2 box amounts by using the Form W-2 box

adjustments inquiry and you can print or generate the form by using the tax

reports that are available on the Payroll area page.

Test Your Knowledge


1. Which report would be most helpful when you try to review pay, tax, and

benefit amounts on every pay statement that is included in a payroll?

( ) Tax register

( ) Pay statements

( ) Benefit register

( ) Worker payment register

2. From which inquiry can you manually enter a tax transaction for a worker?

( ) Form W-2 box adjustments

( ) Tax transaction history summary

( ) Tax transaction history detail

( ) None of these options

3. The Form W-2 box adjustments inquiry lists the amounts reported on Form

W-2 for all workers in the pay cycle that you specify.

( ) True

( ) False

4. You can print the Pay statements report as frequently as is necessary.

( ) True

( ) False


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1. Which report would be most helpful when you try to review pay, tax, and

benefit amounts on every pay statement that is included in a payroll?

( ) Tax register

( ) Pay statements

( ) Benefit register

(√) Worker payment register

2. From which inquiry can you manually enter a tax transaction for a worker?

( ) Form W-2 box adjustments

( ) Tax transaction history summary

(√) Tax transaction history detail

( ) None of these options

3. The Form W-2 box adjustments inquiry lists the amounts reported on Form

W-2 for all workers in the pay cycle that you specify.

( ) True

(√) False

4. You can print the Pay statements report as frequently as is necessary.

(√) True

( ) False


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129550699-80541-AX2012-Payroll

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