If you recently received a Disability Benefits Statement requiring you to add a third-party sick pay payment for one of your employees, you'll need to create a special manual check. To do this, you'll need to create two earning codes: 3rd Party Sick Pay Non Tax and 3rd Party Sick Pay Taxable. Then, you will run a special payroll and create a manual check.


In this article, you will learn:


How to create a earning codes for third-party sick pay

  1. Log in to your Fingercheck account as an Administrator.

  2. Click the SETUP tab > Payroll > Earnings.

  3. Click Add.
    The Add Earning panel that appears.

  4. Scroll down and select the Add button for 3rd Party Sick Pay Non Tax.

  5. In the confirmation boxes that appears, click OK.

  6. On the same panel, select the Add button for 3rd Party Sick Pay Taxable.

  7. In the confirmation boxes that appears, click OK.

  8. Close the panel.

For more information, see How to Set up Earning Codes.


How to run a special payroll for the manual check

  1. Click the PAYROLL tab.

  2. Click Special Payroll.

  3. In the Add a Special Payroll pop-up window, enter a Check Date.

    Important! When completing the date fields in this window, make sure to enter the year of the income that is being taxed.

  4. Enter a Run Number (other than 0).

    The number cannot be the same number as an existing payroll run, and it cannot be 0.

  5. Enter the Period Begin and Period End dates.

  6. Enter the Schedule Date for the check.

  7. (Optional) Complete the other fields as needed.

  8. Click Save.

    You are automatically brought into Step 4, Payroll Entry, which is empty. You will not continue this payroll just yet.

  9. Click the PAYROLL tab again.

  10. Create a manual check as described in How to create a manual check and run the payroll below.

For more information, see How to Run a Special Payroll.


How to create the manual check and complete the special payroll

  1. Create a manual check.

    1. Back on the Payroll Dashboard, click Manual Checks.

    2. Make sure the payroll date is set to the special payroll date you selected in the previous procedure.

    3. Click Add.

    4. Select the employee, select 3rd Party Sick Pay, and click Continue.

    5. In the pop-up window, complete the fields.

    6. Under the Earnings tab, enter the amounts for the third-party taxable and non-taxable sick pay.
      If you do not have a non-taxable amount, leave the non-taxable amount as 0. For an example, see How to read a tax statement below.

    7. Click the Taxes tab and enter any amounts for Social Security (sometimes labeled as FICA or OASDI), Medicare, and Federal.

    8. Click Save.

  2. Resume the payroll run you started in the procedure above.

    1. Click the PAYROLL tab.

    2. In the top-right corner, verify that the date and payroll run you selected for the manual check appears correctly. If it is not correct, select the correct one.

    3. Click Resume Payroll, and click Resume in the pop-up window.

      The the Payroll Entry page will be empty.

    4. Click Next.

      On the Preview Payroll page, you will see the sick pay check you created.

    5. Complete the payroll run.

For more information, see How to Process a Manual Check.


How to read a tax statement

In the example below, the notice lists how much was charged or credited for disability benefits. It also lists taxable amount. To determine the non-taxable amount, you must calculate the difference between the Amount Charged/Credited and the Taxable Amount.

In this example, the gross amount is $881.00, and the taxable amount is $654.14. The non-taxable amount (the difference) is $226.86. In Fingercheck, you would complete the fields under the Earnings tab as shown below.

Under the Taxes tab, you would enter the taxes. The notice above lists FICA, which is Social Security (sometimes labeled as OASDI). No Federal tax was taken, so the amount is left at 0.00.


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