1. Human Capital Management Fundamentals Implementation Guide
  2. Setting Up Tax Status for Benefits

Setting Up Tax Status for Benefits

Access the Basic DBA Information form.

Effect on Gross/Net Pay

Enter a code that specifies the effect a benefit has on gross and net income. Values are:

1: A noncash benefit that is nontaxable.

The benefit, which is a journal entry only, has no effect on gross or net income.

2: A cash benefit that is taxable.

The system adds the benefit to gross and net income.

3: A noncash benefit that is taxable.

The system adds the benefit to the taxable gross income, but net income is not affected other than the tax that is withheld.

4: A cash benefit that is nontaxable.

Gross income is not affected, and the system adds the benefit to net income as an adjustment to net pay. In addition, the system adds this type of benefit to gross wages on the payroll register so that gross − deductions = net.

Calculate Even If No Gross

Enter an option to calculate a DBA when an employee has no gross pay and no PDBA codes exist in the basis of calculation.

When an employee has no gross pay, the system calculates the DBA when these conditions exist:

  • The Calculate Even If No Gross option is selected.

  • The source of calculation is G.

  • The method of calculation is $.

The system then records the resulting amount in arrears and performs one of these functions:

  • Creates an overpayment for a deduction.

  • Calculates it as a benefit or an accrual.

Note: If the PDBA codes exist in the basis of calculation, the system attempts to calculate the DBA, regardless of this setting.