1 Overview to Canadian Payroll

Processing your organization's payroll in-house saves money and gives you control over your payroll functions. The JD Edwards World Payroll system offers simple, yet complete solutions for all your payroll processing needs. You can use this flexible system to efficiently manage the unique payroll needs of your organization, even as your business grows and your requirements change.

This chapter includes the following topics:

• Section 1.1, "System Features"

• Section 1.2, "Terms and Concepts"

• Section 1.3, "Payroll System Flow (Payroll Cycle)"

• Section 1.4, "System Integration"

1.1 System Features

The Payroll system includes many features that you can adapt to meet the unique payroll needs of your organization. The following table highlights some of the many ways you can use the system to meet your payroll processing needs.

Task	Description
Define your payroll environment	You can use your Payroll system to: Track information for an unlimited number of companies within your organization. Set up default values for commonly used information. When necessary, you can override default values. Set up master pay cycles that define your organization's pay periods and corresponding cheque dates. Define an unlimited number of employee and employer payroll deductions, benefits, and accruals. Restrict access to confidential information. Process your payroll in a union environment.
Simplify tax calculations	You can use your Payroll system to: Identify an unlimited number of taxing entities. Take advantage of the payroll tax program that integrates with the Payroll system. This program, supplied by Vertex, calculates federal and Quebec taxes. Calculate taxes for bonuses and other supplemental pay to accommodate different taxing methods, such as concurrent, previous, and cumulative aggregation.
Track complete employee information	Eliminate redundant data entry and improve communication between departments by using JD Edwards World integrated Payroll and Human Resource systems.
Give employees a variety of payment options	You can set up employees to receive their payments by cheque, automatic deposit, cash, or any combination of these forms of payment.
Choose from a variety of time entry methods	To record employees' time, you can: Choose from several methods of entering timecards, including by employee, by business unit, or by day. Simplify timecard entry by defining default job and pay information at the employee or group level. When necessary, you can override default values. Eliminate manual timecard entry for salaried employees and hourly employees who work standard hours. Automatically create overtime pay from regular hours.
Process payments outside the payroll cycle	When you need to process payments outside the payroll cycle, you can: Use the interim cheque feature for special circumstances, such as terminations, pay advances, and vacation pay. Quickly calculate an employee's gross-to-net pay for a manual or computer-printed cheque.
Process payrolls efficiently	When you process payrolls, you can: Select the employees to include in a payroll. You can simultaneously process multiple payrolls for different groups of employees. Review employees' payroll information before you print payments and make any necessary last-minute changes. You can review (and, if necessary, rerun) the steps in the cycle. Correct processed timecards and history to account for negative time, and have the system calculate associated DBAs and create reversing entries to provide a solid audit trail.More easily administer your company's benefits plan by associating an inception-to-date (ITD) limit within each range in your calculation table. Having multiple ITD limits associated with a single accrual is useful for companies with fiscal anniversary accruals. Account for all current pay period activity related to an accrual, so that employees whose pay period amounts fall below an ITD limit, the accrual will be calculated within that same payroll cycle. The accrual will stop calculating if the employee is at or above the ITD limit. Accurately process deductions for employees who have enough money to take a current deduction, but not the arrearage amount. Control the sequencing of employees' cheques to make it easier to distribute payments. Print available and taken accrual amounts other than sick and vacation on all net pay documents and on the payroll register. Review and report benefit accrual amounts in days rather than hours, as needed. Print time entry, pay, summary, and tax reports during a payroll processing cycle. Selectively reconcile computer-generated cheques, manual cheques, auto deposits, or all three types. Use a payroll register report to validate payroll calculations for accruals and pay type, deduction, and benefit totals. Reviewing this information simplifies the process of reconciling your total accrual liability. Create journal entries automatically each time you process a payroll. When you integrate JD Edwards World Payroll and General Accounting systems, you can automatically post the journal entries to the general ledger.
Submit positive pay data	Immediately after cheques are printed, you can build a positive pay work file for some or all paycheque records to create a bank transmittal file that can be sent to your financial institution. This optional security feature helps prevent cheque-cashing fraud.
Review payroll history	Review history for pay types, deductions, benefits, accruals, timecards, paycheques, taxes, and insurance. Being able to review accruals in addition to pay types, deductions, and benefits simplifies the process of reconciling total accrual liability. You can review historical information online or print history reports.
Satisfy government reporting requirements	Print federal and Quebec tax reports, year-end forms for employees, and Statistics Canada reports. Use new laser printer formats for all Canadian year-end forms.
Prepare required tax forms	Process pay period, monthly, quarterly, and year-end tax forms. Use new laser printer formats for all year-end forms.

1.2 Terms and Concepts

The following terms and concepts are important to your understanding of the Payroll system:

• Information about the employee

  • Job type versus job

  • Pay frequency

  • Autopay

• Paying the employee

  • Pay types (transactions)

  • Hourly rates

  • Deductions, benefits, and accruals (DBA transactions)

  • Net pay instructions

• Transferring information to general accounting

  • Automatic Accounting Instructions (AAIs)

• Payments outside the pay cycle

  • Interim cheques

1.2.1 Information About the Employee

This section discusses information about the employee.

1.2.1.1 Job Type Versus Job

In the Payroll system, the term job is used in two contexts:

• Job type

• Job (business unit)

Job types are the classifications your organization uses to identify employees who perform identical (or similar) tasks and functions. For example, your organization might define job types such as administrative assistant, accountant, foreman, and vice president of finance. You can associate pay rates and benefit plans to job types.

Typically, when you see the word job alone, it denotes a business unit. A job (business unit) is an entity within your organization for which you track costs. For example, a business unit might be a warehouse, a project, or a construction site. Although you must assign a home business unit to each employee, the business unit in which the employee works can vary by pay period.

1.2.1.2 Pay Frequency

You must enter a pay frequency for each employee. The pay frequency indicates how often the employee receives payments and determines how the system calculates taxes. Typical pay frequencies include weekly, biweekly, semi-monthly, and monthly.

1.2.1.3 Autopay

During payroll cycle processing, the system uses timecards to create payments for employees. All employees must have timecards to receive payments.

For certain employees, you can automatically generate timecards during payroll cycle processing. Employees whose timecards are automatically generated are classified as autopay employees. Autopay employees include:

• Salaried employees

• Hourly employees for whom you entered standard hours

For autopay employees, you can enter exception timecards for time other than regular work hours, such as holiday and vacation time. You can also use time entry to override the default timecard information for an employee.

1.2.2 Paying the Employee

This section discusses paying the employee.

1.2.2.1 Pay Types (Transactions)

You use pay types to categorize employee earnings. You can set up pay types to meet the needs of your organization. Typical pay types include regular pay, overtime, sick time, and vacation. When you enter timecards for employees, you charge their time to pay types.

1.2.2.2 Hourly Rates

Hourly rates are the pay rates that the system uses to calculate an hourly employee's pay. You can enter hourly rates in several places in the system. There are processing options in time entry that you can set to control the sequence the system uses to search for the hourly rate of pay for each employee included in a payroll cycle. The sequence includes the following rates:

1. An hourly rate override entered in time entry.

2. A rate for a specific group, such as a union, in a pay rate table.

3. A rate per employee by job type using occupational pay rates.

4. A rate per pay grade in the Pay Grade Step Table.

5. A rate per employee.

For each employee, the system stops searching when it finds an hourly rate.

1.2.2.3 Deductions, Benefits, and Accruals (DBA Transactions)

You set up DBAs to automate the process of subtracting monies, calculating benefits, and tracking accruals when you run your payroll cycle.

Deductions represent dollar amounts, excluding taxes, withheld from an employee's earnings. Benefits and accruals represent amounts that the company funds for additional employee compensation. You set up DBAs before you can assign them to employees at the group or individual level.

After you set up a DBA, you can assign it to an employee at several places in the system. During payroll cycle processing, the system uses a default sequence to search these places for the appropriate DBAs for each employee included in a payroll cycle. For each employee, the system stops searching when it finds a DBA assignment.

Figure 1-1 Transactions in the Payroll Process

Description of "Figure 1-1 Transactions in the Payroll Process"

1.2.2.4 Net Pay Instructions

The payments you issue to employees can be any combination of the following forms:

• Cheque

• Automatic deposit

• Cash

When you print payments, the system prints a different form for each type of payment. Each of these forms contains a pay stub that lists the employee's earnings, deductions, and taxes.

In addition to vacation and sick accruals, you can enter a field value to print available and taken amounts on all net pay documents and the payroll register.

1.2.3 Transferring Information to General Accounting

This section discusses transferring information to general accounting.

1.2.3.1 Automatic Accounting Instructions (AAIs)

You set up tables of AAIs that control the accounts to which the system posts payroll journals. During payroll cycle processing, the Payroll system creates a journal entry of every calculation for every employee included in the cycle. These calculations include salary and wage expenses, cash disbursements, liabilities, and accruals. After it creates and summarizes journal entries, the system passes them to the general ledger.

You can also set up rules for how the system summarizes journal entries.

1.2.4 Payments Outside the Payroll Cycle

This section discusses payments outside the payroll cycle.

1.2.4.1 Interim Cheques

When you need to print a cheque between payroll cycles, you can print an interim cheque from the regular payroll cycle. You might print an interim cheque for an employee who is terminated, goes on vacation and misses payday, or receives a bonus.

The interim cheque feature gives you the flexibility to either print an interim cheque from the Payroll system or write a manual interim cheque and enter its information into the Payroll system. The system creates historical records of both computer and manual interim cheques.

Just as with regular payroll cheques, you can submit a positive pay workfile when you print interim cheques to help prevent cheque-cashing fraud.

1.3 Payroll System Flow (Payroll Cycle)

The following graphic shows the system flow that you use to process payrolls for employees.

Figure 1-2 Payroll Cycle

Description of "Figure 1-2 Payroll Cycle"

1.4 System Integration

Your Payroll system integrates with other JD Edwards World systems to simplify your processes and facilitate communication within your organization. Integrating Payroll with other systems saves time and reduces keying errors by:

• Eliminating redundant data entry

• Maintaining current and accurate information across all your business operations

To prevent unauthorized access to confidential information, you can set up system security that allows users to access only the information they need for their jobs.

The Payroll system integrates with the following JD Edwards World systems:

System	Description
Address Book	The Address Book system contains the employees' names and addresses.
Human Resources	The Human Resources and Payroll systems share a common database of employee information. You can use either system to enter employee information, which is then available to users of both systems. The Human Resources system also incorporates the Benefits Administration system.

Additionally, the Payroll system integrates with other JD Edwards World systems:

System	Description
General Accounting	You can set up your Payroll system to integrate with the General Accounting system so that Payroll automatically updates general ledger transactions and account balances. The Payroll system can create and post transactions to the general ledger using the accounting instructions you define. You can use full detail on your labour accounts and summarize your liabilities and cash accounts.
Accounts Payable	You can set up your Payroll system to integrate with the Accounts Payable system, so that you can use payroll information to create vouchers for payroll taxes and other payroll liability amounts. The Payroll system creates vouchers to these payees for employee-paid and company-paid benefits and taxes and for employee obligations.
Job Cost	You can use the Payroll system to enter labour and equipment time by day. Then, you can use the Job Cost system to analyze the labour and equipment costs for a job.
Service Billing	You can use the Payroll system to enter labour and equipment time by job (business unit). Then, you can use the Service Billing system to bill customers for the labour and equipment expenses associated with that job. You can also use Service Billing to charge customers for payroll burden expenses.
Equipment/Plant Management	You can use the Payroll system to enter labour and equipment time. Then, you can use the Equipment/Plant Management system to: Charge a job for use of equipment Track labour for equipment maintenance Track labour for work orders
Contract Billing	You can use the Payroll system to enter labour and equipment time by job (business unit). Then, you can use the Contract Billing system to bill customers for that time.
Work Orders	You can use the Payroll system to enter labour and equipment time against a work order. You can use the Work Orders system to identify specific costs of a task or to track equipment repair costs. You can create work orders for small projects and service calls.