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This article is for Drake Accounting 2019. To view this article for Drake Accounting 2018, click here

All benefits must first be entered for the employer and then assigned to each employee.  A benefit cannot be deleted from the employer’s list if it is setup as a benefit for one or more employees. There is no limit to the number of benefits that may be set up for the employer.

Set Up a Benefit for an Employer

  1. Employees > Benefits & Deductions > Benefits tab
  2. Select the New  button to activate entry fields.
  3. Enter the necessary benefit information.
    • Benefit Name
      • The name of the benefit (not the employee).
    • Account
      • Select the drop box to access the postable accounts list from the Chart of Accounts if using the bookkeeping function.
    • Amount
      • Enter an amount 
        • For a dollar/cents amount, format the number as dollars and cents. 
        • For a percent, enter the amount as a decimal value less than 1. (ex: 5% = .05)

          There are unlimited decimal places.  Edit this amount on an individual employee basis by going to Employees > Add or Edit, and double-clicking the Amount field under the Benefits tab.
    • Ceiling
      • Enter the maximum available amount of this benefit. 

        When an employee reaches the ceiling amount for the year, Drake Accounting discontinues giving this benefit to that employee.
    • State

      • For multi-location employees, select the specific state to which this benefit applies. 

      • When choosing a specific state, the deduction will only apply to payroll in that state. 

      • Select <ALL> to have the deduction apply to payroll in all states.

    • Other Properties

      • Dollars/cents or Percent must always be selected. 
      • When Based on Hours Worked is selected, the benefit is calculated by multiplying the number in the Hours Worked field on the Live Payroll (or ATF Payroll) screen times the Amount
      • If Based on Hours Worked is not selected, the benefit calculates by multiplying gross pay by the Amount.

     4. Select the Taxing and Income Options that apply.

    • Not taxed - not applied to Gross or Net Pay
      • The benefit is not taxed and does not transfer to the Journal if using the bookkeeping function.
    • Not taxed - apply to Net Pay only
      • The benefit is not taxed, but the amount adds to Net pay.
    • Taxed - apply to Gross and Net Pay
      • The benefit is taxed based on the check box selections (FederalSSMedicareFUTAStateLocal, and SUTA), and the amount adds to Gross and Net pay.
    • Taxed - not applied to Gross or Net Pay
      • The benefit is taxed, but the benefit amount is not added to either the Gross or Net pay and does not transfer to the Journal if using bookkeeping function.
    • Taxed – apply to Gross, not to Net Pay
      • The benefit will be taxed based on the selections marked. 
      • By default, all boxes are selected under Benefit is Subject To
      • Edit as applicable for the benefit before selecting Save.
    • 941 Box 2
      • Select this box to include the total paid by the employer for this benefit on Form 941 Box 2. 
      • Checked by default, this option is available only if the benefit is not taxed.
    • 940 Box 3
      • Select this box to include the total paid by the employer for this benefit on Form 940 Box 3 (Total payments to all employees). 
      • Checked by default, this option is available only if the benefit is not taxed.
    • W2 Box 1, 10, 14
      • Select any that apply.
    • W2 Box 12 Code
      • During W2 processing, this code indicates which letters to enter for the Box 12 code.

        5. Select any options applicable in the Benefit Subject To section if the benefit is taxable. 

6. Select Save after entering each benefit.

    • Additional options:
      • Reset to reset the benefit back to the original amounts and want to revert to the original figures.
      • Apply to All to update all deductions and benefits globally for all the employees
        • A message will display asking if you want to update all deductions and benefits on all applicable employees on the Deductions and Benefits tabs under Employee Setup.

          • Click Yes to save or No to exit.
    • Click Exit when finished. 

Apply Benefit for an Employee

  1. Employees > Employee Setup > Benefits tab. 
    • The list of benefits set up for the employer display (see previous sections for setting up benefits). 

      Default settings may be edited at this time — Press F3 to override any changes made back to default values.
  2. Select the benefit and click the arrow icon to assign it to the employee. 
    • The benefit now displays under the Employee Benefit Name
    • Edit the Amount and Ceiling if necessary.
      • Amount
        • Enter the amount of the benefit for this employee. 

      • Ceiling
        • Enter the maximum amount of this benefit that can be taken by this employee. 
  3. Repeat Step 2 for each benefit for a particular employee. 
  4. Select Save when finished. 

    To remove a benefit from an employee’s list, select the benefit and click the arrow icon  to put the benefit back in the first column under Available Benefit Name and select Save when finished.

 Connect With Us!

  Visit our Drake Accounting website

  Visit the Drake Software website

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