How to set up third-party sick pay

This article will assist you with setting up third-party sick pay in EasyACCT.

Special rules apply to the reporting of sick pay payments to employees. How these payments are reported depends on:

• Whether the payments are made by the employer or a third party,
• Whether the third party is an agent of the employer, and
• Whether payroll tax liability is transferred from the employer to the third party.

This solution offers general guidelines. Setup varies by plan.

Follow these steps to set up third-party sick pay:

1. Go to Write-Up or Batch Payroll.
2. Select Update Company Files, Employee Information.
3. Highlight an employee and select Edit Record.
4. Switch to the Wage/Withholding tab.
5. Use the first available GP field for third-party sick pay. 
6. Enter a description in the GP field.
7. In the Applicable Taxes section, mark the checkbox for the taxes that the employee and employer are responsible for.
8. Use the first available WH field for third-party sick pay.

9. Switch to the Earnings Records tab.
10. Make sure the accounts for the applicable GP and WH fields are correct.

Follow these steps to record the third-party sick pay:

1. Go to Batch Payroll, Process Payroll, Payroll Check Computation.
2. Enter the Current Payroll Check Date to be Processed.
3. Click Continue.
4. Select the employee to process.
5. Select the applicable GP code used for sick pay.
6. Enter the amount of the third-party sick pay in the Amount column.
7. On a new line, select the same employee.
8. Choose the Code for the sick pay WH item.
9. Enter the amount of the third-party sick pay in the Amount column.
10. Close the screen.
11. Select the Print Checks/Advices option from the System Navigator. 

The check generated will have a net pay of $0, and was used to calculate the employee and employer tax liability.