Employee Center: Fringe

Navigate
Layout
Add or Edit a Fringe
Fringe vs. Auto Pay
Fringe Benefits
  - Examples

 

Navigate

Find the Fringe page by navigating to HR Admin (module) → Manage Employees → Employee Center → select Employee → Payroll (tab) → Fringe (tab).

 

Layout

The Fringe tab lists all fringes assigned to the employee and additional relevant details:

• Select Add New to create a new Fringe.
• Select Grid Options to add additional columns to the Fringe grid.
• Select Export to export all data shown in the Fringe grid.
• Select Edit to edit an existing Fringe.
• Select Delete to delete an existing Fringe.

 

Add or Edit a Fringe

When you select Add New to create a new Fringe or Edit to edit an existing one, the Fringe editing aside will appear with setup fields.

• Fringe: Select an earning code for this fringe entry. This earning code will be added to the employee’s paycheck.
• Start Date: Enter the first check date for which you want this fringe to be active. This field will automatically default to the next upcoming check date.
• End Date: Enter the last date for which this fringe will be applied. If you want this accrual to occur indefinitely, enter “12/31/2100”.
• Calc Code: Stands for Calculation Code. This determines how the Rate/Amount is calculated. With it left as “Blank = Flat Amount”, then the amount indicated in the Amount field will be a flat dollar amount.
• Frequency: Select the frequency at which this fringe will be paid. If it is to be paid each payroll, then this field can be left blank.
• Agency: When selected, this field generates an Agency Check (a payment to a third party). This field is typically used for child support, garnishments, etc. Agencies must be set up in the Company module.
• Rate Code: When paying an employee for a certain number of hours, you can select a Rate Code to multiply the hours against, instead of their Base Rate. If left blank, the Base Rate will be used.
• Rate: If you are paying the employee hourly, this fringe rate will multiply against their hours.
• Amount: When the Calc Code field is set to a flat amount, this is the amount that will be applied to the Fringe.

• Goal: If a value is entered into this field, the fringe will be applied each pay period until the goal is met. Once met, the fringe will stop automatically.
• Paid: If a Goal is set, this field will keep track of the amount paid toward the goal thus far. Once the goal is met, the fringe will stop automatically.
• Units: This field should only be used for Group Term Life insurance. This field represents the cost of the Group Term Life coverage amount based on the company policy and indicates the number of units that qualify for the rate/amount of the fringe item.
• Minimum: The minimum allowable amount to be paid to the employee for this Fringe.
• Maximum: The maximum allowable amount to be paid to the employee for this Fringe. This field should be completed if Calc Code is set to a percentage……………..
• Year-to-Date Max: The maximum amount that can be paid in one calendar year for this fringe. Once the maximum is reached, payments for this fringe will stop for the remainder of the year. This field should be updated yearly if you wish to apply this fringe continually.
• Miscellaneous Info: This field can be used to document any additional information regarding this fringe. This note will show on a live check.
• Cost Centers: These fields may be renamed in your company (i.e., Department, Location). This is typically left blank, which will attribute the fringe to the employee’s home cost center. Learn more about Departments and Cost Centers.
• Job Code: If you utilize job codes, you can attribute this fringe to a specific job code for reporting purposes. This field is typically left blank.

 

Fringe vs. Auto Pay

A fringe item will only occur when an employee is paid elsewhere in payroll. The fringe item attaches to an existing payment (hours, salary, etc.). An Auto Pay item will generate a payment for the employee every pay period, even if the employee is not receiving other pay within the payroll.

Fringe Benefits

A fringe benefit is a form of non-monetary compensation for performing services or fulfilling a specific company duty. Because you are “paying” an employee for services rendered, this must be added to their year-end wages and be taxed appropriately. However, since the employee is not receiving the actual monetary value, the fringe benefit is then deducted from their pay once it is taxed.

Examples

Below are examples of potential Fringe Benefits that could be set up for your company.

Auto

• Use: Using a company vehicle for commuting purposes.
• W-2 Location: Box 14.
• Details: The employer will determine the benefit amount for an employee’s use of a vehicle. It is fully taxable, but employers can optionally block federal and state taxes.

GTL

• Use: Group Term Life Insurance.
• W-2 Location: Box 12C.
• Details: You must include the cost of Group Term Life Insurance (GTL) beyond $50,000 worth of coverage in the employee's wages. It is taxable to federal, state, and FICA, but is exempt from unemployment taxes (a state-funded PFML plan falls under the unemployment category). GTL can be set up at the beginning of the year to calculate each payroll. You can use the chart in IRS Publication 15-b to calculate the taxable amount of the GTL (based on the insurance cost and the employee’s age).

S-Corp

• Use: 2% Shareholder's Health Insurance.
• W-2 Location: Box 14.
• Details: The cost of premiums for accident and health insurance coverage provided by an S-Corporation to its 2% shareholder-employees must be reported as income. This is taxable to federal and state; it is exempt from FICA.

ERHCC

• Use: Employer Health Care Costs.
• W2 Location: Box 12DD (MEMO).
• Details: Applies to employers with 250+ employees in the previous year. This reflects the total cost of health care that a company pays a provider on behalf of the employee each year. This includes both employee and employer portions.

ERHSA

• Use: Employer Health Savings Account Contributions.
• W-2 Location: Box 12W (MEMO).
• Details: This can be posted per pay period or as one lump sum at the end of the year. If any agencies are connected to the employee HSA deductions, you will need to link those agencies to the ERHSA posting.