As year-end approaches, we have released another product update for 2022. This release includes a new set of payroll functionality and a few other improvements.
If you’d like to read about our last major release from Sep ’22, click here
- Owner’s Draw
- General Ledger in XERO Format
- Auto Assignment of Job Codes
- Payroll Import Template Update
- Employees W-2 Delivery Preference
- HSA Benefits for 2% Shareholders of S-Corp
- Payroll Tax Updates
UZIO Payroll Enhancements
Owner's draw is when an owner of a sole proprietorship, partnership, or limited liability company (LLC) takes money from their business for personal use. The money is used for personal expenses as opposed to taking a traditional salary.
With this product update, UZIO has streamlined the Owner's draw workflow.
We have added the Owner's draw non-taxable earnings in the master earnings list. This earning will appear in the payroll grid once it has been added to the company level earnings, and then you would be able to enter the amount to be paid to the owner.
Click here to learn more about Owners Draw Setup
Things to note
- S- corporations and C corporations’ owners cannot take draws. However, the UZIO payroll system allows any company to include the owner's draw earnings into the company's earnings.
- If you have an owner who is also a W-2 employee, UZIO provides an ability to set up an owner to receive both a taxable salary and a non-taxed owner's draw. To learn more about the personal tax implications of owner's draws (versus payroll tax implications), we recommend reaching out to your tax advisor.
- In a calendar year, an Owner receiving only Owner's Draw will not receive a W-2 Form. However, if they have other taxable wages in a calendar year, a W-2 Form will be issued, and taxable wages will be reported.
- Lastly, if you had paid the owners' draw in UZIO in the past using custom earning, we recommend discontinuing that. All exceptions related to Owner's Draw will be handled automatically by the system if you use the system seeded earning “Owner’s Draw” available in the earnings master list. For help on this, please contact UZIO support at email@example.com.
Click here to learn more about Setting up Owner’s Draw.
General Ledger Report in XERO format
Previously, UZIO Payroll system had General Ledger reports available in Intuit Interchangeable Format (IIF) that are easily imported into QuickBooks Desktop and QuickBooks Enterprise Accounting Software. With this product update, we have added a new format compatible with XERO (an accounting software) that is also now available. Your payroll general ledger can be generated as a CSV file in the XERO format, which can be readily imported as a bill in XERO.A XERO layout sample is shown below
To generate the XERO format file, a general ledger setup must be completed first. In UZIO, if you have already completed the gender ledger, you are good to go and download the XERO format report. If you have not yet set up the general ledger in UZIO, click here for more information. XERO format report can be generated from the reports section once the setup is complete.
Auto Assignment of Job Codes
To process job code hours in payroll for employees who worked in multiple jobs in the same pay period, you had to create the job code at company level. You also had to assign it to the employee.
With this product update, we have enhanced the experience. It is no longer necessary to manually add codes to the company master first, then assign them to employees.
For example, if you prepare the payroll import template and assign new job codes to the employee, but they do not yet exist in the company master, the system will add them automatically to the company master and assign them to the employee. Just make sure the format is the same: "Job Code - Job Description". E.g., “JC01 - Admin” in the payroll import template. If the job code is already existing, then the system wouldn’t add it again but only the hours in the payroll will be processed.
Payroll Import Template
The payroll import template has been enhanced so that employers can input regular wage amount along with employee hours and rates of pay. Employers who have predetermined the payment amount generally require this. However, due to California law, employer must also include the hours and pay rate on the pay stubs along with the amount employees getting paid.
To complying with state laws, this enhanced functionality would enable employers to make prefixed payments to employees. This new column is not available to everyone by default. If this use case is applicable to your company, please contact the UZIO support at firstname.lastname@example.org.
Following is a sample payroll upload template indicating a new column. The new change has no impact on the way you process payroll with or without a payroll import template, unless it has been configured for your company by UZIO support.
The system would not carry out any calculation if the Regular Wage (Amount) column is filled with the hours and rates for the hourly employee, rather it would consider the amount in this column to be paid for the job. If this column is left blank, the system will calculate the job's amount by multiplying the hours and pay rate.
Employees W-2 Delivery Preference
With the last product update in Sep '22, UZIO added the option for employees to record their consent to a preferred delivery method for W2. The default delivery method will be "Paper and Electronic Delivery" unless the employee specifically chooses "Electronic Delivery". Employees must login to the UZIO portal, go to Payroll tab > W-2 Form Delivery Method to update their W-2 Form Delivery Method by 6th January of 2023 if they do not wish to receive paper copies of their W-2 Forms, or vice versa.
W-2 Delivery Method – An Employer view
A new section has been added on the right under "Payroll Documents" called W-2 Delivery Method. Your employees' preferred delivery method is listed in this section. The default delivery method will be "Paper and Electronic Delivery" unless the employee specifically chooses "Electronic Delivery". This information can also be exported to Excel if required.
During the 2nd week of January, W-2 forms and 1099 forms will be sent via FedEx to the company's mailing address. Only those employees who have selected "Paper and Electronic Delivery" will receive a paper copy of their W-2.
We have added the year-end payroll guide with key dates and the information. Upon successful login, you will be prompted to download the guide. PLEASE REVIEW THE ENTIRE YEAR END PAYROLL GUIDE CAREFULLY.
Additionally, you can download the guide later by clicking on this action
HSA benefits for 2% shareholders of S-Corp
Shareholders of S corporations with more than 2 percent ownership have different requirements for HSAs. Any contribution by an employer to the HSA of a shareholder who owns more than 2 percent of the company must be included as taxable income on the shareholder's W-2. In an S corporation, shareholders can't make pre-tax contributions to their HSAs through salary reductions.
With this product update, UZIO has streamlined the tax treatment of HSA employee and employer contribution workflow. For help on this, please contact UZIO support at email@example.com.
Click here to learn more about benefits handling of 2% shareholders of S-Corp in Uzio.
Payroll Tax Updates
Indiana - New Withholding Form
A revised WH-4 form has been introduced by the State of Indiana starting October 1st, 2022. Line 7 on the form has been added as "Adoption Exemption". Each adoption exemption set will deduct $3,000 from the employee's annualized wages when calculating the Indiana State Tax and Indiana county taxes.
The UZIO payroll system is updated with a new field for capturing Adoption Exemptions, if required by employees. A new field will appear on the state tax withholding screen of the employee profile only if the employee's work location is Indiana.
Colorado and Oregon
Colorado Paid Family and Medical Leave Insurance is a new tax for 2023. The total tax rate is 0.90% out of which the employee portion is 0.45% and the employer portion is 0.45%. For 2023, the wage base is $160,200.
Oregon Paid Family and Medical Leave Insurance is a new tax for 2023. The total tax rate is 1% out of which the employee portion is 0.60% and the employer portion is 0.40%. For 2023, the wage base is $132,900.
Washington’s Paid Family & Medical Leave program are an increasingly vital source of support for Washington workers. To keep pace with more people using the program, and as required by law, the premium rate has been increasing in 2023 by WA state. For more information, please refer to the state website.
Starting Jan 1, 2023
- The total premium rate will be 0.8%. The rate for 2022 is 0.6%.
- Employers will pay 27.24% of the total premium and employees will pay 72.76% - a ratio like 2022.
The Massachusetts Department of Family and Medical Leave announced changes to the employer contribution rates and benefit amounts under the Paid Family Medical Leave Act (PFMLA). Effective January 1, 2023, the contribution rate for employers with 25 or more covered individuals will be reduced to 0.63% of covered employees’ eligible wages from the current rate of 0.68%. Employers with fewer than 25 covered individuals will have a contribution rate of 0.318% of eligible wages, a reduction from the current rate of 0.344%.
For employers with 25 or more covered individuals, the 0.63% contribution rate is apportioned between family leave and medical leave, with 0.52% to medical leave and 0.11% to family leave. Employers may withhold from a covered employee’s wages the entire 0.11% contribution rate for family leave contribution and up to 0.208% for an employee’s medical leave contribution. Employers are responsible for directly paying the remaining 0.312% of medical leave contribution.
Employers with fewer than 25 covered individuals may also withhold 0.11% of eligible wages for the family leave contribution and 0.208% of eligible wages for the medical leave contribution.
After this product update, if your company has employees working in CO, OR, WA, MA you will need to complete the state taxation setup for 2023 before you can process the next payroll. It is recommended that you complete this payroll setup beforehand as doing it on payroll day will result in more work and may cause a delay in processing the payroll.
Two new JEDD taxes have been added in OH state
- Burton JEDD tax with 1% rate
- Hampton Inn VII JEDD tax with 2% rate
Please work with your CPA to assess if these taxes are applicable for your business. These taxes require a setup. To do the setup you can go to the State Taxation page and for OH state, you will see the section for the JEDD taxes to select and complete the information.