Third-Party Pay for Payroll System

On the Work on Third Party Pay window (Payroll System > Maintenance Programs > Work on Third Party Pay), you can now specify and edit third-party payments with taxability status for absences caused by an illness, injury outside of work, and so on.

Examples of third-party payments include but are not limited to the following:

• Insurance company payments
• Self-insured plan payment
• Union payments
• Temporary disability plan payments
• Trust fund payments

Items for third-party pay are reflected in the following:

• 941 reports and employee period, month, quarter, or year-to-date reports
• General ledger and employee earnings Payroll register
• State related reports including taxable wages and state withholding for report and tax filings, SUTA and magnetic media
• Third Party Pay Report

Note: In the General Ledger, posted third-party payments recognize employer taxes as expense and liability. As third-party payments are not job related, it is recommended to create a payroll department directing the tax expenses to an operating account rather than a Cost of Sales account.