Deferred Compensation

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I am new with the company, and not as familiar with SAGE 300. Has anyone set up a Non-Qualified deferred compensation plan? I am trying to work with Sage support, but so far two people i've talked with don't even know what a deferred compensation plan is.

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    SUGGESTED

    Tammie -

    Setting up a Non-Qualified Deferred Compensation Plan in Sage 300CRE (Timberline) would be accomplished by setting up a deduction (similar to a 401K Plan), that would reduce the subject to and taxable for each of the employer/employee tax types.  Then actual cost would be posted to the GL department/JC Job/Cost Code in the period it was incurred, but accurately reflecting the amounts for taxability of actual compensation.  The GL account for the deduction would typically be a Liability Account that would either accumulate the amount deferred by the employee(s), or be relieved by an AP invoice to be paid to a fund; depending on how the compensation package is declared.

    It can also be handled by setting up a Fringe, as these items are have no basis of taxability.  Its a matter of preference which direction you go, but I suggest using a deduction from my experience.  I believe it will reduce the potential of modifying existing PR/JC reports to roll the compensation earned was a pay item and the fringe benefit together to get actual period compensation.  You might want to discuss with your report designer an audit report so you can tie these amounts to fund or employee statements.  You probably also want to set this up in a test company, run a check for 1 employee and review the posting and tax reports with your accountant to ensure the setup will work properly for your organization.

    Cheers,

    John McLagan
    Johnny on the Spot
    Sage Consultant

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  • 0
    SUGGESTED

    Tammie -

    Setting up a Non-Qualified Deferred Compensation Plan in Sage 300CRE (Timberline) would be accomplished by setting up a deduction (similar to a 401K Plan), that would reduce the subject to and taxable for each of the employer/employee tax types.  Then actual cost would be posted to the GL department/JC Job/Cost Code in the period it was incurred, but accurately reflecting the amounts for taxability of actual compensation.  The GL account for the deduction would typically be a Liability Account that would either accumulate the amount deferred by the employee(s), or be relieved by an AP invoice to be paid to a fund; depending on how the compensation package is declared.

    It can also be handled by setting up a Fringe, as these items are have no basis of taxability.  Its a matter of preference which direction you go, but I suggest using a deduction from my experience.  I believe it will reduce the potential of modifying existing PR/JC reports to roll the compensation earned was a pay item and the fringe benefit together to get actual period compensation.  You might want to discuss with your report designer an audit report so you can tie these amounts to fund or employee statements.  You probably also want to set this up in a test company, run a check for 1 employee and review the posting and tax reports with your accountant to ensure the setup will work properly for your organization.

    Cheers,

    John McLagan
    Johnny on the Spot
    Sage Consultant

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