Overview

Pak Accounting Inter-Company Payroll feature allows corporations to use a common paymaster which will automatically create G/L entries to record their expenses into multiple Pak Accounting companies.  The advantages of using a common paymaster are:

1. Saves Money – avoids duplicate tax liability. Since employees are paid out of only one company, the tax limits (Federal and State unemployment and social security limits) are only paid once!
2. Saves time – maintaining company and employee information and running payroll cycles, tax reports, check stock, and ACH transmission is done only once in the “common paymaster” company. Shorthanded in one company, it is really easy for an employee to get expensed out in another company on a one-time or recurring basis.
3. Easier on employees – employees get only one check instead of one from each company for which they did work. Income tax withholding is more accurate, and social security limits are applied.

Setup

1. In the payer corporation (common paymaster),
   1. Set up a Sub-Table to identify inter-company payroll company codes to be used in the Common Paymaster.  
   2. Add a Sub-Account in this Sub-Table for each of the other corporations that will be paying employees out of this common paymaster using the same exact 5-character Pak Accounting company code (including the exact number of leading zeroes if applicable).
   3. Set up an inter-company receivable account to record the offset entries that utilize the Sub-Table defined in step
   4. In Payroll Company Maintenance > Advanced Options, let the payroll know of your account and Sub-Table. (NOTE:  Payroll company type is normal.)  
2. In each of the other companies:
   1. Set up an inter-company Sub-Table.
   2. Add the common paymaster’s 5-character Pak Accounting company code as a Sub-Account.
   3. Set up the same account number for an inter-company account.
3. In the paymaster’s company payroll setup, under Employee Master Maintenance > Name address tab, enter the Default company to record the expense side of the payroll entries.
4. Each employee's earning and deduction code will default to the company setup, and the company code can be overridden.
   

Payroll cycle

When running a payroll cycle, the company to which the entries will be posted will show on the Summary maintenance screen and has the same override abilities at the cycle level as changing account or Sub-Account information. The Payroll Register will display the company posting information only if the entry is going to a different company than the “Common” company. If automatic posting is on, General Ledger entries will automatically post in each company.

Limitations:

1. The same Account number must be used for the inter-company due to/from the account. The Sub-Account will be the 5-character company code.
2. On the Company Maintenance > Accrual Accounts screen, if all companies use the same Earnings Expense accounts, then the Accrual Payroll Tax Expense accounts must be the same in all companies as the Common Paymaster company.
3. The G/L entries created by voiding a check are currently only automatically posted in the common G/L company. The system creates the G/L entries in the other book(s); it just doesn’t automatically post them at this time.

Cross Check Employees with other Company(s) and PTB Time Entry Company:

These two fields work specifically with the PTB Time Entry program. Check the box and select the time entry company to cross reference all employees between multiple payroll companies and automatically replicate address, phone number, W-4s, etc, changes from one company to all companies they are defined in. NOTE: This does not affect employee master, it specifically applies employees in the PTB time entry program.