How PeopleSoft distributes taxes and deductions for employees with multiple positions

posted Oct 20, 2017, 4:01 PM by Peyri Herrera
Distribution of taxes and deductions for employees with multiple positions can result in an amount being posted to the ChartString for a position that is not subject to that tax or deduction. We have provided two scenarios to help illustrate the distribution. It’s important to keep in mind the total amount of taxes and deductions charged and posted is correct, it is just the distribution that may be off. This only happens when the two positions’ earnings are charged to different chart of accounts (Scenario 1). If the only difference in the chart of accounts is the Object, then all of the tax or deduction will post to the correct Resource (Scenario 2). We are working toward a solution to assure taxes and deductions follow the funding source of the earnings that generated those taxes and deduction.

Scenario 1: An employee in two positions has earnings that are charged to different Resources

Summary:
  • An employee is paid a total of $3000 from two positions, one charged against Resource 1234000 and the other against Resource 5678000. This scenario shows the total Social Security of $62.00 distributed to the different Resources. 
  • $41.35 in Social Security is distributed to Position A in Resource 1234000 based on the fact that Position A accounts for 66.7% of total earnings 
  • $20.65 in Social Security is distributed to Position B in Resource 5678000 based on the fact that Position B accounts for 33.3% of total earnings 
  • The total amount of taxes and deductions charged and posted is correct, it is just the distribution that is off. This only happens when the two positions’ earnings are charged to different chart of accounts as shown in this scenario. If the only difference in the chart of accounts is the Object, then all of the tax or deduction will post to the correct Resource. 
Scenario 1: An employee in two positions has earnings that are charged to different Resources

Breakdown:

An employee is paid a total of $3000 from two positions.
  • Position A has earnings of $2000, is not subject to Social Security and is charged against Resource 1234000. 
  • Position B has earnings of $1000, is subject to Social Security and is charged against Resource 5678000. 
When the amount of each tax and deduction is calculated, the system correctly calculates Social Security against the amount paid to Position B only.
  • Position A has no Social Security calculated against the earnings paid for Position A. 
  • Position B has $62.00 in Social Security calculated against the earnings paid for Position B. 
When payroll distribution is run, the system distributes the $62.00 in Social Security against all positions from which the employee is paid. It prorates the Social Security based on the earnings paid to each position.
  • Position A’s earnings of $2000 is 66.7% of the total earnings.
  • Position B’s earnings of $1000 is 33.3% of the total earnings. 
It distributes the total Social Security of $62.00 based on the proration of earnings charged to each Resource:
  • $41.35 in Social Security is distributed to Position A in Resource 1234000 based on the fact that Position A accounts for 66.7% of total earnings 
  • $20.65 in Social Security is distributed to Position B in Resource 5678000 based on the fact that Position B accounts for 33.3% of total earnings.

Scenario 2: An employee in two positions has earnings that are charged to the same Resource.

Summary:
  • An employee is paid a total of $3,500 from two positions with the same Resource. This scenario shows the total Social Security of $31.00 distributed to the same Resource. 
  • $26.57 of Social Security is distributed to Position C using 0100-1234000-1000-1110-3311000-000. 
  • $4.43 of Social Security is distributed to Position D using 0100-1234000-1000-1110-3312000-000. 
Scenario 2: An employee in two positions has earnings that are charged to the same Resource.

Breakdown:

An employee is paid a total of $3,500 from two positions with the same Resource.
  • Position C has earnings of $3,000 charged to 0100-1234000-1000-1110-1100000-000 and is NOT subject to Social Security. 
  • Position D has earnings of $500 charged to 0100-1234000-1000-1110-2900000-000 and is subject to Social Security. 
When the amount of each tax and deduction is calculated, the system correctly calculates Social Security against the amount paid to Position D only.
  • Position C has no Social Security calculated against the earnings paid. 
  • Position D has $31.00 in Social Security calculated against the earnings paid. 
When payroll distribution is run, the system distributes the $31.00 in Social Security against all positions from which the employee is paid. It prorates the Social Security based on the earnings paid to each position.
  • Position C’s earnings of $3000 is 85.7% of the total earnings 
  • Position D’s earnings of $500 is 14.3% of the total earnings. 
It distributes the total Social Security of $31.00 based on a proration of earnings charged to the same Resource:
  • $26.57 of Social Security hits Position C using 0100-1234000-1000-1110-3311000-000. 
  • $4.43 of Social Security hits Position D using 0100-1234000-1000-1110-3312000-000.