With the Payroll Manager Forums occuring at the end of April, I wanted to take this opportunity to get some discussion going regarding the handling of Teacher summer advance payments including the handling of the future requirement of interest payments.

I have some suggestions of how the payroll system could be modified to accommodate your needs but I am looking for your input, thoughts and plans, if applicable.

Many sites have already setup various ways of extracting the monies from the Teachers pay to be paid out as a summer advance. Some sites have chosen to use the secondary bank account feature, while others are using various forms of deduction codes.

There is a new Percentage of Net Pay deduction available under the OPS 9.05 (currently being released) that was developed for this purpose, although it could be used for other purposes as well.

While looking at the OPS system and thinking about how best to handle the calculation, reporting and subsequent T5 reporting of the interest on these monies I think the current Storage Bank system could be modified slightly to accommodate your needs.

If the summer advance deduction amount was automatically fed into a storage bank by the payroll system, then the power of the storage bank history and reporting could be utilized. With an entry per period of advance amounts, a process could then be generated that would calculate the applicable interest and deposit the interest into either the same or an alternate storage bank. This process could even generate the GL entries for an automatic Journal Entry interface.

The accumulated advance and interest balances could even be reported from the storage bank(s) onto the employee’s earning statements. This would help to reduce or eliminate the number of phone calls inquiring about the balance of advance accounts.

Some discussion will be needed to determine your requirements as to how the interest payments should be calculated. To calculate the interest for a month would you want the calculation to be on the opening, closing or average balance, do you want interest calculated on the prior interest payments etc.

A process would need to be developed for the handling of the summer payments. This process would need to take the storage bank(s) balance and generate the appropriate number of payments. The interest portion of the payments would need to be recorded under a unique pay code to facilitate the T5 reporting.

The final step would be the development of T5 statements generation along with the electronic xml submission file for CRA. This would include all the existing features of the OPS T4/T4A processing.

At this time, these are only suggestions and I am hoping for a lot of feed back from all of you. Modification to the software is contingent on responses and feedback from the payroll community so please make your voice heard. So please discuss these ideas and put together any comments or suggestions you have for further discussion either at the Payroll Manager Meeting at the end of this week or at our Manager Forums on April 30th. Feel free to email me directly with any questions or comments.

Thank you for your time and attention.

Susan Vernon
TSC Software Developer (Payroll)