17 sbp0112 chapter 11 supplement - knowledgebureau.comknowledgebureau.com/kwcourses/files/17 sbp0112...

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Supplement 1, Chapter 11

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SAGE 50 PREMIUM – STUDENT VERSION

COMPUTERIZED ACCOUNTING SUPPLEMENT FOR CHAPTER 11 P A Y R O L L – A N I N T R O D U C T I O N

OUR PRACTICAL GOAL: Here is what we are going to cover:

Adding a new employee in Sage 50 Premium Student Edition

Updating Earnings Information in Sage 50 Premium Student Edition

Calculating Net Pay in Sage 50 Premium Student Edition

Posting payroll to the general ledger in Sage 50 Premium Student Edition

Preparing T4’s in Sage 50 Premium Student Edition

THE RESULTS: Here’s what you should be able to do:

Add or modify employee information

Update earnings information for employees

Calculate the net pay

Post payroll entries to the general ledger

Prepare T4 slips



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The Payroll Module As in a manual bookkeeping system, computerized payroll systems are the most complex area that a bookkeeper can be involved in. Many small businesses will choose to outsource the production of their payroll to an outside service provider that specializes in payroll for this reason. However, many small businesses will expect their bookkeeper to be proficient at managing a payroll system. This is intended to be only the briefest of introductions to this complex segment of the Sage 50 Premium Student Edition program. Our later course, Advanced Payroll for Professional Bookkeepers will cover the issues covered here, and more, in much more detail. For now, we will focus on the most basic functions of the system – paying an employee. Open your Sage 50 Premium Student Edition program and look at the Payroll column, and we’ll get started.



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Add an Employee Before you can record payroll payments to an employee, you will have to create an employee record.

1) Click the Employees icon and click Create to view the following Employee Records screen:

2) There are currently no employees set up in My Retail Business. Note that the set up of the above screen is similar to all of the other Add Account screens reviewed in supplements on adding accounts, adding vendors and adding customers. If an employee is already set up, you can select that employee. If not, you can enter the necessary information. There are a variety of tabs available to view information about an employee. We will add the following employee:

Bradley Penner 245 First Ave Fabulous City, MB, R5R 3R3 SIN- leave blank – Sage 50 Premium Student Edition checks validity, so must be a valid SIN



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Birthdate: September 2, 1967 Hire Date: October 1, 2013

3) At the Personal tab, enter the information provided above. When your screen looks like this, select the Taxes tab:

4) Review the Taxes screen (displayed below showing the amounts from #5 below) and take note of the following information. On this screen, we can enter the basic information required by the program to determine the correct amount of tax to be deducted from Bradley’s pay cheque.



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5) Select the province of Manitoba in the tax table field, using the

drop down menu. Bradley’s Federal Claim code from his TD1 form is $11,038 for Federal purposes and $8,884 for Provincial purposes (these numbers are based on the 2013 TD1 forms).

http://www.cra-arc.gc.ca/formspubs/frms/td1-eng.html

6) Bradley would like an extra $10 per pay period deducted from his pay, and we can accommodate this request by entering $10 in the additional federal tax field. As we wish to deduct EI and CPP/QPP, we should ensure these boxes are ticked. The rate for EI refers to the rate at which employer remittances are calculated, which will in most cases by 1.4. The right hand side of this screen shows you the deductions for each payroll tax on a historical basis, and if you scroll over, YTD.

7) Move to the Income tab, this screen is displayed below. You will

notice that there are many different items listed in the Income column of the screen. These are different types of earnings, which can be customized by the employer. For Bradley, we want to enter



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a salary of $2,000 every 2 weeks. This means there are 26 pay periods per year.

We will also need to know about retaining vacation pay. Bradley is entitled to two weeks of vacation per year, which is 4% vacation pay. We will retain the vacation pay, so that when Bradley goes on vacation, we can continue to pay him. If we did not retain vacation pay, the system would pay it to the employees on every cheque. This might be used for temporary employees. The last thing we can choose here is the account that we want our wage expenses charged to. We won’t use the payroll linked accounts, so select the circle to allow you to enter an account number. The wages and salaries account for My Retail Business is account 5410.

8) When you are finished with the Income screen, it should look like this. WE don’t have to complete any other screens in order to be able to pay an employee. There are many other data entry screens available though. Be sure to have a look at them so you are aware of how much the Sage 50 Premium Student Edition program can do when it comes to payroll.



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9) When the additional employees are set up, select Save and Close.

10) View the employees you have set up by clicking on the Employees

icon off of the Payroll screen.

Computerized Bookkeeping Assignment

Practice adding the following employees in Sage 50 Premium Student Edition: David Stephens and Mary Ellen Smith

An employee listing is provided in a file titled “MRC - Employee Listing” on the Knowledge Net.



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Modify or Remove Employees 1) Select Employees from the Payroll column in the Home window. 2) Double click the employee you wish to modify. In this case, select

Bradley Penner, because we entered the wrong salary amount. Bradley actually earns an hourly rate of $20 for normal hours of 40 per week.

3) This next screen should look familiar now! Move to the earnings tab, and enter Bradley’s earnings correctly. Don’t forget to remove the incorrectly entered salary amount, or he will be paid for both items. The screen should look like this when you are finished:

4) Click the Save and Close button and you have modified your first account.

5) To delete an employee, follow the same process as above, except

select the Remove icon off the Employees screen. From the



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Employee List, you can pick an employee, just to see what will happen. But, when the system asks you if you really want to remove the employee, say no because you will need these employees later on.

Creating Individual Paycheques 1) From the Payroll column, select the Paycheques icon:

2) Press OK if a warning appears, as we don’t have any history – these

are all new employees. The following screen appears:

3) This is the screen we will use to generate payroll cheques. In the

To the Order of field, select Bradley. We want to pay him on October 20, 2013 for the period ended October 13, 2013. Enter these dates in the appropriate fields. You can use the tabs on the bottom part of this screen to look at Bradley’s earnings, deductions and taxes, as well as some other information. Be sure to look at the income and taxes screens in detail.

4) When you are ready, click the Process button: . Note, that you may get the following messages “The payroll formulas being used are only for session dates 1/1/20xx to 12/31/20xx. Are you sure you



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want to continue with this transaction?” and/or “Date entered is beyond 10/1/20xx by 7 days. Are you sure you want to continue?” Click yes/ok to these messages (this question is only for illustrative purposes - we are more concerned with the process of entering payroll cheques in this module than the deductions that result).

5) You have now created the paycheque for Bradley Penner..

Creating A Payroll Cheque Run

In order to complete the paycheques for the other employees, we will need to complete the Payroll Cheque Run, select:

1) The following screen appears. This is the screen that we will use to

indicate which employees we wish to pay this time:

Computerized Bookkeeping Assignment

Practice creating a Payroll Cheque Run in Sage 50 Premium Student Edition

Pay the other two employees: David Stephens and Mary Ellen Smith using the instructions below.



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To indicate who you wish to pay, put a check mark in the first column on the left. This is done by clicking in the column. Do the same for the second column, which will indicate that you wish to have a paycheque or direct deposit slip printed for the employee. We are not using the third column, which would allow for direct deposit. If you click the icon at the top of either of the first two columns, all employees will be selected. Notice that there isn’t an amount showing for Bradley Penner since he has already had a paycheque created for this period. Adjustments can be made for employees by clicking the employee’s name. The cheque details appear at the bottom of the screen.



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2) When you are finished selecting all employees, you should print the Payroll Cheque Run Summary – select Report from the Menu bar, then select this report. Print it and check it for accuracy. If there are errors, you can still make corrections.

3) The next step is to check the Payroll Run Journal Entry. Select

Report from the Menu bar, then select Display Payroll Run Transaction Detail to view the following screen:

4) Once you are satisfied that everything is correct, you are ready to

print payroll cheques. Close the Payroll Run Transaction Detail screen. Select File from the menu bar on the Payroll Cheque Run screen. Select Print Payroll Cheques.

5) Once payroll cheques have been printed, the final step is to post

the payroll to the general ledger. Click Process: Congratulations! You’ve just processed your first payroll.

Printing the Payroll Reports We have already seen how to view the Payroll Run Transaction detail report. When viewing any of these report screens, you simply have to click the printer icon in order to print. Printed copies of these journals should be maintained in the company’s records.

Printing T4 Slips Being able to produce T4 slips using a computer program like Sage 50 Premium Student Edition is a wonderful time saver. Click on Reports on the Menu Bar at the top of the Employees screen, and select Print T4 Slips. A message will come up asking you to review employee pensionable earnings. Click OK. The next screen that comes up is the T4 Slip and Summary Options screen:



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On this screen, you may select all, or just one employee. You may also enter information about exactly what it is you want to print. The information required for the T4 Summary is entered. Select an employee, or press Select All and OK. You will not be able to proceed because we don’t have a SIN for our employees, but, if we had this information, the T4 Slips and T4 Summary would be printed.

Other Reports There are a variety of Other Payroll reports available. As our coverage of Sage 50 Premium Student Edition payroll is fairly basic, many of the reports won’t work for us, but it is a worthwhile exercise to view the reports available from the Reports menu on the Employee screen:



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IN SUMMARY: KEY CONCEPTS To add, modify or delete an Employee record, use the relevant icon on the Employees screen. Processing a pay begins with processing pay cheques, followed by a payroll cheque run. To view or print a report, select Reports off the menu bar on the Employee screen of the Payroll screen. Note that this is the location of the function for printing T4 Slips and the T4 Summary.

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