Sage BusinessWorks allows employers to easily record company-paid fringe benefits that accumulate over time. One common method is to deduct the fringe benefit with each payroll throughout the year. This tip outlines how to set up and process these recurring fringe benefits to ensure accurate payroll and W-2 reporting.
Processing fringe benefits in Sage BusinessWorks.
Step 1: Setup the fringe benefit deduction:
- Go to Payroll > Utilities > Maintain Deductions.
- Click the Paper icon in the bottom right (this means new) to create the deduction.
- Enter an ID (e.g., Auto) and a Description (e.g., Auto Allowance).
- From the Method drop-down:
- Choose Fixed Amount per Pay Period for consistent amounts, or
- Variable Entered on Timecard for changing amounts.
- Under Category > Company Individual.
- Assign the appropriate Credit and Debit GL accounts.
Step 2: W-2 Reporting Setup
- Click the W-2 button.
- Uncheck None to specify the appliable Box Number (e.g., Box 12).
- Enter the ID to Use that matches your reporting needs.
Note: If FWT (Federal Withholding Tax) or SWT (State Withholding Tax) are not selected, the deduction will not be reported in Box 1 or 16 on the W-2. Please consult a tax advisor to ensure proper tax reporting.
Step 3: Activate the deduction for an employee:
- Navigate to Payroll > Employees > Maintain Employees.
- Select the employee and click Deductions.
- Enter or select the deduction ID and ensure Status = Active.
- Click Accept to save the deduction.
- Save the changes to the Employee.
Step 14: Process payroll with fringe benefit:
- Go to Payroll > Processing > Timecard Entry.
- Open the employee’s timecard.
- For Variable deductions, select the deduction from the Earning Type drop-down and enter the amount.
- Click Accept to add the deduction.
- Save the timecard.
- Run Automatic Payroll Calculation and review the Payroll Register.
- Proceed to print payroll checks as usual.
Fringe benefits processed this way will be accurately reflected in your payroll records and on the employee’s W-2.
If you have questions or need assistance with your Sage BusinessWorks software at any time, please contact our BusinessWorks support team at 260.423.2414.
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About the Author: Mary Hildinger
