When running payroll, SchoolInsight Financials keeps track of six different “subtotals” to aid in different calculations. The six subtotals are:
- Tax
- SUTA
- TRS (IL) / PSRS (MO)
- IMRF (IL) / PEERS (MO)
- FICA
- Medicare
Every payroll item has a relationship to each of these subtotals determined by the status assigned to each subtotal. The relationships can be configured on each District Payroll Item then further customized on Employee Payroll Items if need be. The three statuses and their behaviors are:
+ |
The item adds to the subtotal |
- |
The item subtracts from the subtotal |
Does Not Contribute |
The item has no effect on the subtotal |
After calculating the subtotal from all payroll items that add to or subtract from the subtotal, the resulting amount is used to calculate the value of another payroll item. For example, the FICA payroll item is calculated as 6.2% of the FICA subtotal, but the FICA item itself should be marked “Does Not Contribute” to the FICA subtotal.
Wages
Typically, all district payroll items with the calculation step Wages should contribute to all subtotals.
When added to an employee, the retirement plan on the position should determine which subtotals are actually applicable. For example, if the position has the retirement program TRS/PSRS, then the item should not contribute to IMRF/PEERS or FICA. The Mass Add Employee Payroll Items page should automatically fill in the correct subtotals, but you’ll need to adjust the subtotal relationships manually when adding one payroll item at a time.
Guidelines
The following guidelines are common practices found at most schools. Some circumstances may necessitate deviation from these practices.
Wages
- The District Payroll Item version of each wage should contribute to all subtotals. The Employee Payroll Item should be configured to match the position’s retirement plan.
- TRS and PSRS positions should have wages contributing to Tax, SUTA, TRS, and Medicare.
- IMRF and PEERS positions should have wages contributing to Tax, SUTA, IMRF, FICA, and Medicare.
- A position that contributes to neither retirement program should have wages contributing to Tax, SUTA, FICA, and Medicare.
Deductions
- All pre-tax deductions should subtract from Tax; post-tax deductions should not contribute to Tax.
- Section 125 pre-tax deductions (cafeteria plans) may subtract from SUTA in IL, if you wish to deduct them from gross wages on the IDES unemployment reports.
- Section 125 pre-tax deductions (cafeteria plans) may subtract from FICA and Medicare.
Withholding and Employer Taxes
- All withholding and employer taxes typically should be marked “Does Not Contribute” for all subtotals.
Benefits
- Benefits vary widely from district to district. Refer to your contracts for details.
Example
Below is an example setup for an employee who is enrolled in no retirement plan. Only a few payroll items are represented as an example; a real employee would need additional items for withholding and employer taxes.
Payroll Item |
Amount |
Tax |
SUTA |
TRS/ |
IMRF/ |
FICA |
Medicare |
Wages |
$1000 |
+ |
+ |
|
+ |
+ |
|
Pre-Tax Deduction A |
$500 |
- |
|||||
Pre-Tax Deduction B |
$100 |
- |
- |
- |
|||
Non-Taxable Benefit |
$200 |
+ |
+ |
Because the employee is not enrolled in any retirement plan, wages do not contribute to TRS/PSRS or IMRF/PEERS, but they do contribute to every other subtotal.
Deductions A and B deduct from the Tax subtotal, so both federal and state income tax calculations would be calculated assuming that taxable wages are $400.
The SUTA subtotal is equal to gross wages and will be reported on the IDES Unemployment Report and Missouri Wage Report as $1000.
Since the benefit contributes to FICA and Medicare, the employee has to pay FICA and Medicare taxes on that $200. The subtotal is calculated as the $1000 wages minus $100 from deduction B plus the $200 benefit. The employee will have to pay the FICA and Medicare rates based on wages of $1100.