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Updated: 12/31/2013 Understanding and Setting up Workers Compensation.

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Presentation on theme: "Updated: 12/31/2013 Understanding and Setting up Workers Compensation."— Presentation transcript:

1 Updated: 12/31/2013 Understanding and Setting up Workers Compensation

2 Updated: 12/31/2013 Workers Compensation is payment by the employer and employee in some states for some part of the cost of injuries received by employees in the course of their work. Workers Compensation

3 Updated: 12/31/2013 Worker Compensation Overview How much workers compensation you owe depends on the arrangement you have with your insurance carrier. Some insurance carriers ask you to pay periodic payments of the actual amount of insurance you have accrued, based on wages paid or hours worked. Other carriers ask you to pay an estimated amount; then, at the end of the year, they perform a reconciliation to determine whether you've paid the appropriate amount, compared to the actual accruals. Payment schedules also vary. Some insurance companies ask you to pay every month. Others arrange a different schedule with you.

4 Updated: 12/31/2013 From the Edit menu, Select Preferences. Click the Payroll & Employee Icon. Click on the Company Preference Tab. Turning on Workers Comp

5 Updated: 12/31/2013 Workers Comp Preferences Select Track Workers Comp. Options: Display message to assign codes give a warning. Exclude overtime premium from Workers Comp calculation, excludes the overtime premium.

6 Updated: 12/31/2013 Workers Comp Payroll Item When Workers Compensation is turned on a payroll item is create for Workers Compensation.

7 Updated: 12/31/2013 Entering New Workers Compensation Code From the List Menu, select Workers Comp List. Click on the Workers Compensation Code button. Enter the Workers Compensation Code. Enter a Description. Enter a Rate. The rate should be entered per $100.00 of gross wages. Enter a date for the Start using rate on.

8 Updated: 12/31/2013 Experience Modification Factor Some insurance companies assign you an experience modification factor to use when you calculate your workers compensation premiums. This rate is based on your company's record of workers compensation claims. The better your track record, the lower your rate (or at least the fewer increases), which sometimes results in a discount on your workers compensation premiums. The more claims you have, the higher your rate, which sometimes results in a higher premium.

9 Updated: 12/31/2013 Enter Experience Modification Factor QuickBooks supports one Experience Modification Factor. If the client has no Experience Modification Factor then enter 100.0% Note: If the Experience Modification Factor is left blank QuickBooks will not calculate Workers Compensaton. KB 1007577

10 Updated: 12/31/2013 10 Worker Comp Code List

11 Updated: 12/31/2013 11 Assigning Workers Compensation Code in Employee Record Edit the Employee. In the Change Tabs: select Workers Compensation Enter the Workers Comp Code in Assign Workers Comp Code. If the Employee is exempt select Exempt from the menu.

12 Updated: 12/31/2013 How Workers Compensation is Calculated Hourly Wages X Total Hours = Wages Wages X Workers Comp rate = Workers Comp Workers Comp X Experience Mode = Workers Comp Amount 14.50 X 48 = 696.00 X.1755 = 122.15 X.81 = 98.94

13 Updated: 12/31/2013 Paycheck with Workers Compensation

14 Updated: 12/31/2013 Editing Experience Modification Factor From the List Menu, Select Workers Comp Code List. Click on the Experience Modification Button and select edit.

15 Updated: 12/31/2013 Editing the Experience Modification Continues In the New Experience Modification Factor enter the new rate. Enter a date for the Start using rate on and click Okay. Click Ok.

16 Updated: 12/31/2013 Workers Compensation Summary From the Report menu, select Employees and Payroll and then Workers Compensation Summary or Workers Compensation Detail.

17 Updated: 12/31/2013 Calculating Washington (WA) Workers compensation By product design, the QuickBooks Workers Compensation feature (that works with either the Enhanced or Assisted Payroll service) calculates workers compensation based on wages earned. Some States requires that workers compensation is calculated based on the number of hours worked. KB 1000660 Washington Is one of these States The State of Washington has several different L&I rates.

18 Updated: 12/31/2013 Setting up Payroll Items for WA Workers Compensation The first item is an Hourly wage compensation item. The second item is a Company Contribution, Tax Tracking set to none and calculated based on hours. The third item is a Deduction, with W2 tax tracking set to "none and calculated based on hours and Gross Pay. (This payroll item is setup if part of the workers compensation is being paid by the employee.)

19 Updated: 12/31/2013 Payroll Item List

20 Updated: 12/31/2013 Add the Payroll Items to the Employee Defaults In the Payroll & Compensation Info tab for each employee record, add the Earnings, Company Contribution and Deductions payroll items.

21 Updated: 12/31/2013 Creating paycheck with multiple Workers Compensation Rates. When you create paychecks, the hours will then track to the payroll items. If an employee works multiple jobs with different workers compensation rates, select the payroll items for each rate and then input the hours for each rate in the other payroll items manually, distributing the total hours into the separate workers compensation rates. Important: You must carefully match the workers compensation code payroll items to the matching company contribution and deductions payroll items on the paycheck.

22 Updated: 12/31/2013 Creating a Paycheck with Washington Workers Compensation

23 Updated: 12/31/2013 Payroll Summary Report From the Report Menu, select Employees and Payroll. Click on Payroll Summary. Click on Modify Report Enter the correct Date range. In the Display Columns by Select Total Only. Click on the Filter Tab. Under the Filter select Payroll Items. Select Multi Items. Check all the payroll items associated with the worker compensation, include the earning items, company contribution and deduction items.

24 Updated: 12/31/2013

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