Page 103 - Essentials of Payroll: Management and Accounting

ESSENTIALS of Payr oll: Management and Accounting
consuming task if the number of possible deduction options is large, if
employees are allowed to make deduction changes at any time, or if
employees are not well-educated as to the impact of deduction changes
on their net pay.
A particularly elegant best practice that resolves this problem is to

give employees direct access to the deduction data so they can deter-
mine the impact of deduction changes themselves and enter the
changes directly into the payroll database. To do so, it is necessary to
construct an interface to the payroll database that lists all deductions
taken from employee paychecks (with the exception of garnishments,
which are set by law). However, this is not enough, for most deductions
are usually tied to a benefit of some sort. For example, a deduction for

a medical plan can only be changed if the underlying medical plan
option is changed. Accordingly, an employee needs access to a “split
screen” of information, with one side showing benefit options and the
other side showing the employee’s gross pay, all deductions, and net pay.
This view allows the employee to modify deductions and see the impact
on net pay. Examples of deductions for which this data view will work
are federal and state tax deductions, medical and dental plan coverage,
life and disability insurance coverage, and pension plan deductions.
Though the primary emphasis of this best practice is on allowing

employees to alter their own deduction information, it can be used in
other ways, too. For example, employees can alter the bank routing and
account numbers used for the direct deposit of their pay into bank
accounts, or change the amounts split between deposits to their savings
and checking accounts. They can also use this approach to process
requests for additional W-2 forms or to download files containing the
employee manual or other relevant personnel information.

An example of this approach is the dental plan.Assume that on one
side of the computer screen an employee is presented with five dental

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