Third-Party Sick Pay Solution

[welcomewiki]

STEP 3: Run payroll.

• Execute a separate payroll (off-cycle for manual check) for the IT0221 entry created above. Alternately, IT0221 entries can be processed in the next regular payroll run.

Wage Types 9911, 9912, 9903, and 9905



Wage Types /1XX and /3XX


Wage Types /4XX



Wage Types /6XX


Wage Types /7XX

Other Wage Types

[welcomewiki]

STEP 4: Map wage type to legal forms.


9911 (3PSP Taxable Ben)

• Execute Wage type is added to /701, thereby printed on W2 Box 1.
• FACS performs no special processing.

9912 (3PSP Non Taxable Ben)

• FACS prints this wage type on box 12 with code ‘J’ when available.

9901 (3PSP /401 Offset)

• FACS deducts this amount from the withholding taxes while remitting withholding tax (third-party vendor has already remitted this tax on employee’s behalf).

9903 (3PSP /403 Offset) and 9405 (3PSP /405 Offset)

• FACS maps this wage type to line 7 of form 941 to offset FICA taxes already paid by EE.

Possible Customer Specific Enhancements


The 3PSP solution configuration supports IT0221 subtypes blank, YANA and YAWA. Customers must use YANA or YAWA if 3PSP data is received after year end. Further, if subtype YAWA is used, IT0235 must be used to stop the system from calculating other taxes such as FED/STATE withholding, etc.
Normally, most customers will receive this data after the last payroll of the year is complete, and customers will be forced to use YANA/YAWA. This means that customers will have to maintain IT0235, which could lead to more data entry effort. The following describes two different options that will avert additional data entry. Depending on client requirements and the specific situation, one or more options can be implemented and used.

Option 1: Create Custom p-class 71 Value to Withhold Only ER FICA and Unemployment

This option can be used if the customer has numerous employees receiving 3PSP benefits.

1. Create a new value for p-class 71 (a %), and assign this value to 3PSP wage type 9910 (3PSP taxable benefit).
2. Change the tax model for FED (R and W) for p-class value % to calculate only taxes /404, /406 and /410.

No other tax model changes are necessary. If this value is not defined for other tax models/authorities no other taxes will be taken.

Option 2: Create IT0235 Manually for the State in which the Employee Resides

This option is recommended for customers with only a few employees receiving the 3PSP benefit, and additional IT0235 maintenance is not an issue.
With this option, there is no change to the current solution. However, the customer must maintain additional data on Infotype IT0235 for the 3PSP process.

Documents Impacted

• Wikinewforum.com Blueprint document
• Configuration Handbook