The Basis Codes can be Earnings, Deductions, or Liabilities.

If you specify an earnings code, the system will include its amount in the deduction or liability's subject amount.
For example, If an Employee earns 1000.00 in federally taxable wages, that 1000.00 earned through the employees earning code would be the BASIS of the Federal tax.

Basis Codes: EDL Type

Select the type of code that you want to add to the calculation basis for this deduction/liability. The following options are available:

• E-Earnings - Select this option if you want the system to include this earnings code's posted amounts in the deduction or liability's subject amount.
• D-Deduction - Select this option to specify a pre-tax deduction that the system should not include in the basis for calculating the deduction or liability.
• L-Liability - Select this option to include a liability in the basis calculation for a deduction if the following criteria from the Info tab applies:
  • Calculation Category is set to F-Federal, S-State, L-Local, I-Insurance, or E-Employee, and
  • Method is set to G-Rate of Gross or R-Routine.

Basis: EDL Code

Enter a valid earnings or deduction code, based on your selection in the EDL Type drop-down field. Press F4 for a list of valid earnings or deduction codes.

If you specify an earnings code, the system will include its amount in the deduction or liability's subject amount.

Note: For liability distribution, you must add an earnings code to distribute the liability amount to. This earnings code must be set up in PR Earnings Code with the Include in Liability Distributions box checked. Additional true earnings codes (you checked the True Earnings for Payroll Reports box in PR Earnings Codes) must be added here. For these codes, you should check the Subject Only box so that the liability is not calculated on them, but they will be used in the liability distribution.

When adding deduction codes, you can only add pre-tax deductions (you checked the Pre-Tax box in PR Deductions/Liabilities). Additionally, you can only add pre-tax deductions to deduction/liability codes that have the Calculation Category drop-down set to F-Federal, S-State, L-Local, or I-Insurance, and the Method drop-down set to either G-Rate of Gross or R-Routine. When you add a pre-tax deduction here, the system will not include it in the basis for calculating the deduction or liability.

Note: Pressing F5 from this field will not work when you have the EDL Type drop-down set to D-Deduction, as you are already on the setup form for deductions (PR Deductions/Liabilities).

Subject Only

Check this box if the earnings are to be included in the subject amounts only (and not the calculations) for this deduction or liability.

Do not check this box if the earnings are to be included in both the subject amount and the basis for calculation for this deduction or liability.

Examples of Typical Uses

For deductions, a typical example would be for federal withholding. Earnings that are 'subject only' will be included in the “Wages, Tips, and Other Compensation” amount on the W-2, but will not be included in the basis for calculating withholding tax on a pay check.

For liabilities, it is a method to distribute the liability to earnings without the earnings being a basis for the calculation. For instance, if you are setting up an employer's 401k matching liability, and you want the employer's liability to be distributed to the original earnings, you would set up the liability as follows:

• Assign the 401k earnings along with straight time, overtime, and other earnings in the grid.

• Flag all earnings, except the 401k earnings, as 'subject only'.

• Assuming that negative earnings are not included in liability distributions (you did not check the True earnings for Payroll Reports box in PR Earnings Codes), this will allow the liability to be distributed across the regular earnings rather than with the 401k earnings, and to be updated to JC.