Medlin Payroll Software can be used to calculate and pay Paid Time Off (PTO).

•Common PTO parameters for all employees

•PTO-A (the left column on the PTO Setup screen)

•Select PTO-A as one of the Adjustments to Income on the Paycheck Setup tab. Edit the description as desired.

•PTO-A is always calculated using the parameters shown in the first column of the PTO Setup screen.

•All eligible (not marked as exempt) employees use the same parameters.

•If you have any employees setup as salaried, be sure to review the “Salaried Employees” section below.

•If your employees already have PTO hours earned, enter their current PTO balances by clicking Setup, Paid Time Off, then Enter Beginning Balances.

•PTO-B (the right column on the PTO Setup screen)

•Select PTO-B as one of the Adjustments to Income on the Paycheck Setup tab. Edit the description as desired.

•Leave the "Per employee setup/calculation" box clear (not checked)

•All eligible (not marked as exempt) employees use the same parameters.

•If you have any employees setup as salaried, be sure to review the “Salaried Employees” section below.

•If your employees already have PTO hours earned, enter their current PTO balances by clicking Setup, Paid Time Off, then Enter Beginning Balances.

•Individualized PTO calculations with different parameters for each employee (Professional Edition Only)

•PTO-B (the right column on the PTO Setup screen)

•Select PTO-B as one of the Adjustments to Income on the Paycheck Setup tab. Edit the description as desired.

•Check the "Per employee setup/calculation" box.

•All eligible (not marked as exempt) employees use the parameters shown in the lower right of their Employee Setup screen.

•If you have any employees setup as salaried, be sure to review the “Salaried Employees” section below.

•If your employees already have PTO hours earned, enter their current PTO balances by clicking Setup, Paid Time Off, then Enter Beginning Balances.

Our examples are accurate with known information at the time this document was prepared. We STRONGLY suggest you contact the specific tax agency to review their requirements.

Earning PTO

•Hourly employees earn PTO based on the number of hours worked, up to the Maximum Earned Hours per Year amount you have set.

•Salaried employees earn the Maximum Earned Hours per Year amount with their first eligible paycheck each year.

•For Hourly employees, PTO is not earned until the employee has met the Waiting Period Before Earning PTO setting.

•When creating a new paycheck available PTO includes PTO earned with the new paycheck.

Employees Not Eligible for PTO

•On the Employee tab, click the Edit button in the exemption section, and mark the employee as not eligible for PTO.

PTO Pay Rate

•When PTO hours are paid, the PTO pay rate is the employee's current hourly rate, as shown on the Paycheck tab. (For the Pro Edition, we use their highest current rate.)

•PTO Hours are not counted as hours worked.

•If the employee has had a recent pay rate decrease, check your PTO requirements to see if you have to award PTO at a higher rate.

Negative PTO

•You can 'loan' PTO by paying more PTO than available.

•If an employee's PTO balance is negative at the end of the year, their available PTO hours for the next year will be lower than the maximum PTO hours for a year - since they used part of the new year's maximum PTO hours during the prior year.

•'Loaning' PTO can create a paperwork headache - we suggest not allowing employees to use more PTO than available.

PTO Setup Tab

•Waiting Period Before Earning PTO (Hourly employees only)

•The number of days from the Hire Date before the employee can earn PTO.

•If you have a waiting period other than calendar days from hire to your pay dates, you can manually manage the employee's eligibility by using the exemption settings on the Employee tab.

•Waiting Period Before Using PTO (Hourly employees only)

•Determines when the employee can begin using PTO.

•To set a number of days from the Hire Date - enter a number of 120 or less.

•This setting is used to show a warning if you pay PTO before this waiting period has ended.

•This setting does not stop you from paying PTO before the waiting period has ended - such as when the hire date is not aligned with a pay date.

•Hours Worked to Earn One Hour of PTO (Hourly employees only)

•Enter the hours an employee must work for each full PTO hour earned.

•To award PTO in one chunk - instead of earning based on time worked - enter 0 in the Hours Worked to Earn One Hour of PTO box.

•With the first eligible check each year, the Maximum Earned Hours per Year amount will be added to the employee's balance, subject to the Maximum Accrued Balance amount.

•Maximum Hours Available per Year

•Enter the maximum number of PTO hours employees can use each year.

•When calculating available PTO hours, all PTO hours used for the year are considered.

•Maximum Earned Hours per Year

•Enter the maximum number of PTO hours employees can earn each year.

•Maximum Accrued Hours

•Enter the maximum number of PTO hours an employee can accrue/store.

•PTO Report

•Print a listing of PTO used for the selected year.

•If printing a report for the current year, the report will also include PTO available and PTO balance.

•To comply with your tax regulations, you should also print and retain a copy of each pay stub.

•Edit Beginning Balances

•Use this option carefully.

•Any beginning balance you enter will be limited to the Maximum Accrued Hours you have set.

•Do not edit the beginning balance for an employee unless the employee has at least one saved check for the current year.

Salaried Employees

•If an employee does not receive the same pay every pay date - with no reduction for time off and no increase for overtime - do not set the employee as salaried.

•Since salaried employees are compensated with no reduction for time off, PTO tracking is for reporting purposes only.

•If you enter PTO on a salaried employee's paycheck, their regular pay is lowered by the PTO since a salaried employee receives the same base pay (salary) on every check.

•Salaried employees earn their full year's PTO with their first check of the year.

•For PTO purposes, a salaried employee's hourly rate is calculated based on the pay period selected for the check - 52 weeks per year, 40 work hours per week, and 8 work hours per day.

NOTES

•When you are required to comply with regulations regarding PTO, it is beyond the scope of Medlin Payroll Software to make sure you meet the requirements bestowed upon you by the bureaucracy in charge.

•Be sure to check with the proper agency for complete and current regulations.

•On the Paycheck tab.

•PTO Hour entry fields are always shown after the Overtime entry field no matter what order you select on the Setup tab.

•If you add, edit, or delete a check in a prior year, no PTO calculations or warnings are provided.

•Employee's PTO balances are only calculated for the current year.

•PTO is calculated on a calendar year basis.

•On the Worker's Compensation Report, PTO is part of total pay.

Waiting Period Information

•Since Medlin Payroll Software does not record hours worked on specific dates, PTO calculation considers the paycheck date as the date the hours were worked.

•The easiest way to stay in compliance with a maximum waiting period is to set the maximum to be the required number of days MINUS the number of days in your pay period.

•Using California's Sick Pay as an example, the maximum waiting period before using PTO is 90 days.

•If you pay weekly, set the maximum to 83, the 90 day maximum less your 7 day pay frequency.

•Medlin Payroll Software does allow you to pay PTO earlier than the calculated waiting period.