Overview

The payroll process includes many steps and requires discipline, accuracy and follow-up. See the payroll process for a complete diagram of the data and processes.

Gross pay versus net pay

Payroll logically divides into gross pay and net pay.

1. Gross pay

Gross pay records the number of hours worked each day. Hours worked are payroll earnings, as are overtime hours worked. Amounts can also be recorded if no hours are involved, such as bonuses, commissions, etc.

Absences are also recorded here – both paid and unpaid leave, which is why gross pay is also called Attendance module. Since some absences can be linked to a time bank, the link to the time bank must also be provided. Use the Attendance detail window to view, enter and modify gross pay transactions.

The gross pay module is an integral part of the Umana system. Even when you opt for an external payroll system, this module is still used to manage the detail of absences.

2. Net pay

Net pay is executed starting from gross pay earnings. It calculates the statutory deductions (e.g. taxes) and other deductions such as benefits and union dues. Umana has its own integrated net pay system, but can also export data to an external payroll service. See below. Use the Net pay module to view, generate and adjust net pay.

An important difference between gross pay and net pay

Gross pay is recorded every day, while net pay is only recorded per pay period. When gross pay transactions are processed by net pay, they are stamped with the pay period when they were paid. Accordingly, transactions (and therefore costs) can be analyzed by pay period or by date worked, even if the pay periods are weekly.

Net pay: integrated or external?

The Umana integrated net pay system is available, along with the possibility of exporting the data to an external net pay service. At installation, one or the other can be installed.

Umana net pay

With the Umana integrated net pay system, you use the net pay calculation and finalization of temporary pay functions to finalize payroll. You also use the Net pay window, and the gross pay and net pay reports.

External net pay

With an external net pay service, you only use the Umana gross pay, which you export to your net pay provider. To finalize the period, you do the update after the payroll.

In both cases

Regardless of whether you use the Umana integrated net pay system or an external net pay service, the Attendance and gross pay module, generation of salaries, pay calendar, employee pay information (payroll parameters), and gross pay reports will be used.

Data

Gross pay and attendance transactions come from the TIMEDT file. Net pay transactions are entered via the time sheet into the temporary file TEMPPAY. Once finalized, they are transferred to the net pay detail file: PAYDT. The PRPAR file completes the employee file with information such as the bank account number (for direct deposits), statutory deductions, etc.

Operation

Input screen

To access the Employee info input screen:

Data | Net pay | Employee info... main menu
Person navigation pane

This is where information that affects the employee's payment is entered, e.g. bank account numbers for direct deposits.

To access the Pay calendar input screen:

Data | Net pay | Pay calendar... main menu
Pay navigation pane

The pay calendar defines the pay periods by pay group. The pay calendar is also the starting point for the whole process. Click the Tools buttons to access the operations available for payroll.

The Calculate temporary pay operation calculates net pay. The results are saved in the TEMPPAY temporary file. This calculation takes into account the specific benefits and deductions of the employee's BENEFIT file and other parameters of the PRPAR payroll file. This operation is one of the operations available via the pay calendar.

The Finalize temporary pay operation transfers the transactions of the TEMPPAY temporary file to PAYDT net pay and marks the transactions in gross pay in order to save a history. This operation is available via the pay calendar.

The Generate salaries operation creates normal transactions in gross pay for employees – regular, recurring hours or amounts. This operation is accessible via the pay calendar and Data | Attendance, Gross pay | Generate salaries... main menu. There is an option to undo these transactions.

Export to an external net pay system

If an external payroll service is used, Umana provides the tools required for export (Interface to external net pay). Once net pay is produced, the "update after payroll" should be executed.

The export to an external payroll system is equivalent to calculating temporary pay in the Umana net pay. The update after payroll is the finalization (above).