How should changes in employee salary or age be accounted for?

How should changes in employee salary or age be accounted for?

KB10-001

If the user wants the system to account for changes in employee salary or age automatically during the payroll process then mark the Auto Update checkbox for the LIT Code on the Life Insurance Tax Code Setup window. For example, if an employee gets a raise on their anniversary and the coverage is based on the new pay rate the system will automatically adjust the total coverage during payroll processing. The same is true at the beginning of the year when the employee’s age increases for the IRS calculation.

If the user wants to manually account for changes in employee salary or age, then unmark the Auto Update checkbox for the LIT Code on the Life Insurance Tax Code Setup window. For example, if all employees receive a change in pay amount the first payroll in June then the total coverage amount only changes one time a year. The system would not have to run the calculation every pay period only the first payroll with the new rate. You can choose to update the rates from the Life Insurance Tax Calculator window yourself once a year as part of the salary review effort. Keep in mind, you will also want to run the Life Insurance Calculator update on the first payroll of the year to account for the changes in the employee’s age.

 

2016-01-13T02:06:22+00:00 April 24th, 2014|Uncategorized|0 Comments

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