Create a Workers' Compensation Class

Setup > Payroll Details > Workers' Compensation Classes > New

1. On the Setup menu, point to Payroll Details, and then click Workers' Compensation Classes.
2. Click New(New button: creates a new master file record.) .
3. In the Abbreviation box, enter up to ten characters that you can easily identify the workers' compensation class(Workers' Compensation Class: Workers' compensation class codes define the job classes for the different types of work your employees perform. Work and earnings in various classes are then used in workers' compensation reporting. By setting up classes you can more accurately report time for employees who work in job categories that are subject to high workers’ compensation rates.) by.  For example, RSC for Retail Sales Clerk or WS for Warehouse Staff.
4. In the Name box, enter up to 35 characters of required information that describes the workers' compensation class.
5. In the State box, select the state this workers' compensation class applies to.
6. In the Class Code box, enter up to 15 characters that will be used on reporting for this workers' compensation class.
7. Select the Liability and Expense Account this workers' compensation class should post to in the General Ledger.
8. In the Effective Date box, enter the date that this workers' compensation class will become effective. With effective dates, you an set up a new rate for a class prior to the rate change. The new rate will not take effect until that date so you don't have to wait until that date to set up the changes.
9. The Tax Forms Item box will only be enabled if there is a requirement for tax forms reporting. This requirement is dependent on the state selected.
10. In the Certified Payroll Code 1-4 boxes, enter up to 25 characters that will be used on certified payroll reporting for this workers' compensation class.
11. In the Rate box, enter the primary class rate to be used in calculating the employer’s workers’ compensation contribution. The rate is either an hourly rate or a percent, depending on how this state calculates workers’ compensation. Depending upon which state was entered, you will either have single rate or two rates. The two rates would be an employee rate and an employer rate, enter the rate for each.
    

12. To add notes to this project, click Additional Notes, enter the notes, and then click OK.
13. Click Save to save the workers' compensation class and return to the List tab, or click Close to save the workers' compensation class and close the Workers' Compensation Class screen.

To setup information specific to this workers' compensation class, select Setup > Payroll Details > Employers > Taxes tab. From the left side of the screen, under the state abbreviation the class was created in, select workers' Compensation and then on the right side of the screen add the workers' compensation identification number, liability account, and determine the workers' compensation overtime earning calculation. Then, select the workers' compensation class you created from the left side of the screen, and on the right side of the screen setup the expense account, select the date the workers' compensation class becomes effective, and enter the rate for the class.

When you process and post payroll, the text automatically generated from the Notation field will display "State-WC-Workers' Compensation Class" (for example, MN-WC-Salesperson) on the Transaction Journal to easily identify the information for workers' compensation tax.

See Also