Managing Departments in Payroll

Background

You can set up and manage departments. This will allow you to classify your employee payroll by groups and report on dollars per department. If you have Accounting, you can also Manage Departments in Accounting

Setting Up Departments in Payroll

1. Go to Settings > Company Settings > Manage Departments
2. Click “Add New.”
3. Enter the department name, up to 50 characters.
4. If you have both Accounting and Payroll, you will need to indicate that this department should be used in Payroll. Otherwise, it will only be used in Accounting.
5. If you have more than one work location, select the locations this department can be used.
6. Click “Save.”

The departments you set up at the company level can now be assigned to work locations first and then employees. 

Assigning Departments to Employees

To properly report employees by department, you must assign at least one department to each employee. Departments are assigned on the employee’s “Pay Info” screen.

How to assign departments to hourly employees

1. Go to Payroll > Employee List > Click Employee Name > Pay Info > Edit.
2. For each pay rate assigned to the employee, select a department from the dropdown list.
   • You may assign up to five departments per person. 
   • If the employee has multiple roles, you can assign the same department if needed.
   • If you need to assign multiple departments for the same role, you will need to enter a unique role description for each.
3. Click “Save.”

How to assign departments to salary employees

1. Go to Payroll > Employee List > Click Employee Name > Pay Info > Edit.
2. Click “Add A Department” to assign a department to this employee.
   • You may assign an unlimited number of departments to salaried employees.
3. If you have assigned more than one department to a salaried employee, choose your department salary allocation preference
   • Allocate on a payroll-to-payroll basis:  Each time you run a payroll, you will need to select the department(s) for this employee’s salary.
   • One-time, ongoing allocation
   • You can either allocate a dollar amount or percentage of their salary to more than one department if needed. 
   • You can change the allocation when you run payroll if needed.
4. Click “Save.”

How Departments Work in Payroll

• After you have assigned employees to departments, when you enter payroll, you will see a “Department” column on Payroll Step 1.
• The assigned department will display each pay rate for each employee.

Allocating multiple departments for hourly employees 

• Each pay rate and department is a row on the sheet. 
• If you need to make a change, you will need to cancel the payroll and edit the employee’s Pay Info page.
• Any additional money paid to hourly employees, such as a bonus, will be allocated to the employee’s primary department, which is shown in the first row.

Allocating multiple departments for salary employees

If a salary is allocated to more than one department, you will see the Salary Rate divided among each department, as you had indicated on the employee’s Pay Info tab.  

Any additional money paid to salary employees, such as a bonus, will be allocated to the employee’s primary department, which is shown in the first row.

To change salary department allocations in payroll

• If the employee is set to “Allocate on a payroll-to-payroll basis,” you can update the dollars allocated between each payroll.
• If the employee is set to “One-time, ongoing allocation,” click “Re-Allocate Rates” and enter the updated dollars allocated among the departments for this payroll. The dollar amounts must equal the total salary pay rate.
• To reset the allocations back to their original setting, click “Reset Allocations.”

After payroll is run, you will be able to view a breakdown of your department dollars on the Departments in Payroll Report.

How to Edit a Department

1. Go to Settings > Company Settings > Manage Departments.
2. Click the “Edit” icon.
3. Change the name of the department.
4. Click “Save.”

Any prior transactions that used this department will be updated with the new name.

How to Inactivate a Department

You can only delete a department if it has not been used in a payroll or assigned in an accounting transaction. Otherwise, follow the instructions to make the department inactive.

• Go to Settings > Company Settings > Manage Departments.
• Click the “Edit” icon.
• Uncheck the “Active” box.
• Click “Save.”

If a department has not been used in payroll or assigned to an accounting transaction, click the trashcan at the end of the row.

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