How to Link Payroll Formulas in Sage 50
Payroll formula has an important role to play in Sage 50. These help to determine the local, and federal, calculations, expectations, or state-level tax deductions. This also comprises the gross pay alignment tables and percentages. However, the payroll formulas are created as per the specifications of the organizations so that the user-maintenance formula can be used in the future for modifications, editing, and also updating.
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The main purpose of these formulas is to function as enhancements that connect the network administrator, Sage Support, or even the accounting aid to make the notifications. So, How do to Link Payroll Formulas Within Sage 50? Let us find out in this article.
In this blog, we would address one common query received from many users of Sage 50, which is related to the Sage payroll module. They wanted to know about the Sage 50 Payroll formulas and how to link them. If you also want to know about it, we would request you to go through this blog till the very end.
What are the Sag 50 Payroll Formulas?
Payroll formulas are not included with the Sage software. After you have installed Sage 50, you will see during the payroll entry that most payroll taxes will not be calculated automatically. Rather, payroll tax amounts will be shown as inaccurate or zero. In order to calculate the payroll taxes in Sage 50 and to stay updated with regulatory changes, you will need to subscribe to a payroll plan and install the latest tax updates. After that, your payroll taxes will be calculated based on employee setup, location, filing status and current tax laws.
Read More : Sage 50 Payroll Tax Calculations Could not be Found
What are the types of Payroll Formulas in Sage 50?
There are two distinct sets of payroll formulas available in Sage 50. These are discussed briefly here-
- Sage-Maintained Payroll Formulas- These formulas apply to all the companies you have linked in Sage 50. They contain predefined formulas related to state, federal and certain local tax calculations. When you subscribe to a plan that includes payroll, you will obtain tax updates periodically as and when changes are made in tax laws. After you install these updates, any changes you have made in Sage-Maintained Payroll Formulas will get overwritten.
- User-Maintained Payroll Formulas- These formulas are used only by the particular company for which they are set up. They are not overwritten after the tax updates are installed. Therefore, here, you can enter customized calculations related to 401(k) contribution scenarios, state unemployment rates, vacation accruals, special localities or other such matters not handled by your payroll plan.
How can you Edit a User-maintained Payroll Formula?
Please follow the steps below-
- Click on the File menu
- Choose Payroll Formulas
- Click on User-Maintained
- The User-Maintained Payroll Formulas window will be displayed on your screen.
- Click on the drop-down arrow next to the Formula ID field
- Specify a formula to edit
- Make the necessary changes based on the fields as discussed below-
- Formula ID: In case you need to enter a new formula, provide an ID not included in the Formula list box. Make sure to follow the naming conventions of Sage 50 while entering the ID.
- Name: The name of the formula should have two or three parts separated by a space
- Calculation Name: This should be the name of the plan or tax
- Payee: EE – if paid by the employee or ER- if paid by the employer
- Payroll Tax Year: The last two digits of the calendar year for which the tax formula is applied
- Filing Status: If you want this formula to be used for all employees, irrespective of their filing status, choose All Filing Statuses from the drop-down box. In case you select an alternate status, you will need to create multiple formulas with unique IDs for every filing status. Also, you need to ensure each formula ID and filing status uses the same tax name
- Click Save after making your changes.
- When finished, select Close.
Set up a Payroll Formula
| Step | Sage 50 Field or Icon | Action |
| 1 | Formula ID | 1. Precisely type the short identification code of the new formula you are creating. Be sure to verify that the identification code does not previously exist in Sage 50 or you might accidentally change another formula. Sage 50 helps you keep a check on this by displaying a drop-down list of existing formulas and highlights the first formula starting with the identification code entered by you as you type. After you enter a new unique identification code no existing formula should be highlighted in this list. 2. Now that you have checked your identification code is correct, go to the next step by clicking the OK icon located at the bottom of the drop-down list or pressing or on your keyboard. |
| 2 | Name | Enter the name of the new formula you are creating |
| 3 | How do you classify this formula? | 1. Choose the type of the formula from the drop-down list provided. It is important that you select the correct type so that the formula is used for its intended function in Sage 50. 2. In case you are completing the Sage 50 Practice Set, you are required to only set up a tax formula. Note that the Tax agency field will appear if you select Tax. |
| 4 | Tax Agency | Here, selects the type of government the tax formula that applies to. You can either select Federal, State or Locality from the list of options available |
| 5 | Effect on Gross Pay | Choose the effect of the calculation on gross pay |
| 6 | Filing status | 1. Choose the correct filing status. 2. When you are completing the Sage 50 Practice Set, you will be asked to create a formula that is to be used for all employees so that you can select All from the drop-down list provided. |
| 7 | Use this formula as a filter on the Payroll Tax report | 1. Click the box next to this item to enter a checkmark when you want to use the formula as a filter on the payroll tax report. 2. In case you are completing the Sage 50 Practice Set, simply leave this box blank. |
| 8 | Formula | 1. Here, enter one or more equations that you can use to calculate the result of the formula. 2. When you are completing the Sage 50 Practice Set, you will be given the payroll tax formula that you are needed to enter into Sage 50. |
| 9 | Save | After you have entered the information within the User-Maintained Payroll Formulas window, be sure to review the entries and click the Save icon to record the formula |
Also Read : Report to Use to Verify Information on 940 at Sage 50
Conclusion
We hope the discussion above will help you with all the information you wanted to have about the Sage 50 Payroll Formulas. If you want more information about it, you should get in touch with some authorized Sage experts .
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Frequently Asked Questions (FAQs)
How can I Set up the Payroll Module in Sage 50?
Please follow the steps below to setup the Payroll Module in Sage 50–
1. Open Sage 50
2. Select Setup
3. Go to the Settings section
4. Go to Payroll
5. Click Linked Accounts.
6. Now, check whether there exists an account for all the fields, in every subsection (Incomes, Taxes, Deductions, etc)
7. Click OK
8. Choose Setup
9. Click on Settings
10. Go to Payroll
11. Next, go to Incomes
12. Check whether each income is set up correctly for taxes.
13. If you need to calculate the vacations accurately, select a liability account in the Vac. Owed section
14. Now go to Deductions and check if the deductions used are set up properly.
15. Select Taxes
16. Enter the precise percentage rates for all types of additional taxes.
17. Select OK to finish
How can I Install the Sage 50 2020 Payroll Tax Table Update?
Please follow the steps mentioned to install the Sage 50 2020 Payroll Tax Tble Update–
1. Click the My Computer icon on your desktop
2. To go to the Sage 50 data path, click on Browse
3. Next, click the Update folder below the data path
4. Find out the tax table update file
5. This file will be displayed on your screen with all the relevant information such as
6. The month of the update, payroll year and the Sage version
7. Make sure to type in all the relevant details
8. Click the tab labeled Run Update File
9. Do as per the instructions being displayed on the screen
10. Now, click on the I Agree tab on the terms & conditions window
11. Repeat the initial steps to save the tax forms already installed
12. Wait till the updation finishes
13. Henceforth, you should be able to run the new tax tables smoothly.
What is the Sage 50 Payroll Annual Licence?
The Sage 50 Payroll is available as an annual license. You might need to upgrade your service to add more staff as your business expands. All information necessary for processing your payroll and the year end returns are included in the license package. You will need to renew the license, if you want to add new employees. While you try to add a new employee, you may receive a message that you have reached your employee limit. This is the time when you need to upgrade your Sage 50 Payroll Annual Licence.
