Money Codes are types of payments made to employees in addition to their regular wages. Examples of Money Codes are Bonus, Commission, or Severance.
As you set up your company in the wizard, you may customize your list of Money Codes, depending on how your company uses them, and add an unlimited number of new ones if needed. The Money Codes are listed alphabetically by description. In order to mark a code “Frequently Used,” click the star. Frequently used Money Codes will always appear in your Payroll Entry Sheet to pay your employees.
To manage your Money Codes after you have completed the wizard:
- Settings > Payroll > Hours & Money Codes. You can mark a code Frequently Used right from this list without needing to edit the code.
To add a new Money Code:
Click the Add New link. A set of blank fields will appear.
- Name: This is the long-word description for the money code that will appear on paychecks and in reports throughout the system. Can be up to 20 characters.
- Is this a frequently used money code? Click the star to always have this code appear in payrolls.
- W-2 Box: This only needs filled in for certain money codes. See the dropdown for the list of options. If the money code does not fit in any of these categories, leave this field blank. The money will be included in the appropriate box on the W-2. For further instructions, see IRS Instructions for Form W-2.
- W-2 Label: The available selections will depend on what was selected in the W-2 Box Number field. Only complete if the W-2 Box Number field is filled. NOTE: If you change the W-2 box number or W-2 label, the W-2 form only shows the box number and/or label that is current at the time of W-2 printing. If you are removing a box number, the W-2 will not show a box number or label for this money code.
- Taxable: If the money paid should be included in taxable income, keep this box checked. If the money is not taxable, uncheck this box. See What Types of Income Are Taxable? for more details.
- W-2 Third Party Sick Pay? Only check if this money code will be used to update an employee’s wage file with taxable or non-taxable sick pay benefits paid to an employee by a third party (such as an insurance company.) If this box is checked, Box 13 on the employee’s W-2 will be checked, showing the employee received sick pay benefits from a third party as required by the IRS. Otherwise, leave this box unchecked. Do not check if an employee is enrolled in a sick pay plan but did not actually receive sick pay benefits. For more details, see the help article How To Set Up Third Party Sick Pay Reporting. For further instructions, see IRS Instructions for Form W-2.
To edit an existing Money Code:
Click the “Edit” link in the row of the Money Code you want to edit. Keep the “Active?” box checked to use this money code on the Payroll Entry sheet. If you uncheck it, this type will not appear on the Payroll Entry sheet, but will be available for reporting. Make your changes, and click either Save or Cancel.
To delete an existing Money Code:
Click the “Delete” trashcan icon in the row of the Money Code you want to delete. If you do not see a Delete trashcan icon in that row, this Money has already been used in a payroll and cannot be deleted. Click either OK or Cancel.