For tax and reporting purposes, all imputed income (i.e. cash tips) and the monetary value of fringe benefits (i.e. group term life insurance, personal use of a company car, gym memberships, gift cards) offered throughout the year must be entered into Fingercheck360. If you're using Fingercheck360 for payroll, you'll need to report earnings through what's called a calculate-only earning. A calculate-only earning will not generate payment but will reflect as an earning on your employees' W-2. This article will explain the process of creating a calculate-only earning. Contact your account representative if you need any help.
Log onto your Fingercheck account and go to the “Setup” tab. From the drop-down menu on the top left of the page, select “Payroll Menu.”
From "Payroll Menu," select "Earning Codes." In this test account, we have several earnings set up that qualify as imputed income. Click the yellow "Add" button to create your own earning.
Start creating your policy by naming it with a code, short description, and a description. Select the appropriate "Earning Type" and by "Calculation Rule" select "FlatAmount." Leave the rest of the fields blank, as you will be entering the amount during Step 4 of the Payroll process. Tick "Hide Hours on Payroll Grid" so that the hour's column doesn't show up for the earning (tips). Tick "Import Amounts From Time Card" to enter the amounts manually on the time card or just add it to payroll. Tick "Imputed Income" to tell the system this is solely for recording purposes.
Now when you run payroll, you can enter the amount underneath the earning. It's that simple! No extra pay will be generated for the employee, and the amount will be reported for tax compliance purposes.
To learn more about our cost-effective and user-friendly cloud-based time and attendance software, check out our website at Fingercheck.com. Interested in our services? Sign up for a 30-day free trial and get started with Fingercheck today.