A payroll tip for handling one employee with two different wage rates and union fringe benefit packages on a single paycheck. The following question was submitted through our “Ask the Expert” form.
How do I setup one employee to be paid weekly, with two entirely different wage and benefit rates, depending on the customer or item; through a single paycheck? I would like to set it up to just select one rate or the other and have the appropriate wage rate, benefits and contributions be automatically selected. This is for one employee working with two different unions, so the fringe benefit liabilities go to different parties on different liability checks.
Any suggestions would be appreciated.
A. While the expensive construction specific software programs can handle this easily, QuickBooks will require a little more work on your part – but it can be done.
In your Payroll Item List create two different hourly wage categories (with applicable ST, OT, DT) rates – let’s say for example that your Unions are 327 and 456; so you would have payroll wage items named something like 327L (for local 327 Laborer) and 456L (for local 456 Laborer) and 327L-OT, etc.
You would then create company contribution payroll items for your different benefit rates. You could either “lump” them all together under 327 Benefits and 456 Benefits; but I recommend splitting them out individually – 327 Health & Welfare and 456 Health & Welfare. When you set up your company contribution items make sure that:
- the Track Expenses by Job option is checked
- on the *Tax Tracking Type window that you select None
- on the **Taxes window, select {check} any taxes that should be calculated on each specific fringe
- on the Calculate Based on Quantity window, select the option to Calculate this item based on quantity
After all of your payroll items are created, go to the Employee Center and Edit this employees record. Go to the Payroll & Compensation Info tab and enter the wage items and company contribution items with their applicable hourly rates. Also, make sure that you check the option to Create paychecks from timesheets; that way you can enter the hours under each job, service item and payroll item combination in the timesheet and it will flow over into the paycheck when you create it.
When you create your paycheck in the earnings section you’ll be able to see how many hours were worked under each of the specific union wage rates – these hours will be the Quantities that you enter against each of the fringe benefit packages. This will then multiply the hourly union fringe benefit rate times the number of hours worked.
*Some unions will require that taxes are calculated on Vacation fringe benefits.
**The Tax Tracking Type window offers an option for Fringe Benefits – these are Fringe Benefits that the IRS considers to be taxable to the employee that must be reported on employee W-2′s, be very careful that you do not select this option by mistake.
Union payroll or any type of payroll that involves employees being paid more than one rate of pay or having more than one fringe benefit package can be accomplished in QuickBooks – it’s just a matter of setting it up correctly and implementing procedures that need to be followed. If you would like help in setting this up, please feel free to contact me.
I hope you’ve found this article on setting up 1 employee with 2 different Union Benefit packages and pay rates to be helpful – if so please take a moment to leave a comment or share it with others on your favorite social media network.
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