Setting Up Third Party Sick Payments (3PS)

Setting up Third Party Sick Payments (3PS)

These are typically STD (short term disability) – 90% of tickets or LTD (long term disability). Companies like AFLAC and Mutual of Omaha provide this service to employees. We record these wages for ER and/or EE tax purposes.

Clients should upload the 3PS documents to Employee Documents > Confidential Other under the HR document type.

What to look for: Who is responsible for the W2? Payroll Vault or the 3^rd party. If this is not obvious in the documents, reach out to the client to find out. They may have to reach out to their 3^rd party provider.

Short Term Disability (STD) with W2 Preparation

Earnings code to set up when PV is producing the W2

• If PV is producing the W2 and the benefit is taxable then set up or check the setup of the earnings code: 3P Sick Taxable
• These earnings are not paid – the EE has already been paid by the 3^rd party
• These earnings are taxable to the ER. The EE taxes have been withheld by the 3^rd party
• If the code has already been set up, check the setup of the code
  

Entering the 3^rd party amounts

• Navigate to individual time entry
• Click Add New
• Check Type: 3^rd Party Sick
• Check Date: Payment date from the document
• Check number: If provided
• Save

• Switch Template to All
• Find the earning 3P Sick Taxable and enter the gross benefit amount in the dollars column
• Enter the EE SS and EE MED (Sometimes FED and state Withholding will need to be entered)
• Preview Check
• You should see both EE and ER taxes
• The 3^rd Party Sick check will process with the next payroll run

Employee Documents

Navigate to Employee Documents

3PS documents should be saved under the “confidential other” tab Document type: 3P STD/LTD with the format:

• “First initial.Last Name””Benefit date” entered “date”
• Example: J.Jones 7/1/2022 Entered 7/30/2022

Short Term Disability (STD) without W2 Preparation

• If the 3^rd party is producing the W2 and the benefit is taxable then use memo calc 3P Sick ER Taxes Only
• These earnings are not paid – the EE has already been paid by the 3^rd party
• These earnings are taxable to the ER. ***The EE taxes have been withheld by the 3^rd party

• Navigate to individual time entry
• Click Add New
• Check Type: 3^rd Party Sick
• Check Date: Payment date from the document
• Check number: If provided
• Save
• Switch Template to All
• Find the memo calc 3P Sick Taxable and enter the gross benefit amount in the dollars column
• Preview the check
• You should see only ER taxes
• The third party sick check will process on the next payroll run