Paying COVID-19 Federal Paid Leave Hours in Payroll

Background

Before you run payroll in Patriot Software using COVID-19 paid leave hours, please see the help article Setting Up Employee Paid Leave in Patriot Software due to COVID-19, which includes a training video.

How to Pay COVID-19 Federal Paid Leave Hours in Patriot Software

On Payroll Step 1

When you run a payroll, the pay period end date and pay date must be equal to or greater than 4/1/2020. These paid leave hours are available through September 30, 2021. Your pay period end date must be on or before 9/30/2021, or else you will see a warning that the COVID paid leave hours cannot be used in that payroll.

The three COVID hour types will appear in the grid for each employee, both hourly and salary, as long as they are marked “frequently used.”  If they are not frequently used, you can turn on the “Show All Pay Types” switch to see them.

Enter the number of federal paid leave hours to be paid to the employee for this pay period.  

If you are paying either COVID 2/3 Sick or COVID Family Leave hours, we will automatically calculate the ⅔ rate of regular pay (or 67%) for both hourly and salaried employees.

On Payroll Step 2 and 3

When you have moved to Payroll Step 2, you will see a message showing the total tax credit that can be taken for this payroll. This message also shows on Payroll Step 3.  If you are a Full Service Payroll customer, you will see the tax credit breakdown when you view the details on Step 2.  For more details, see the help article How to Claim Payroll Tax Credit for COVID-19 Paid Leave.

Employees will still have their normal income tax withheld from these paid leave payments. However the payroll tax credits will reduce the amount you are required to deposit.

Paying Salary Employees COVID Paid Leave

When paying a salary employee with COVID hour types, their full salary will be reduced proportionately if you are using either the COVID ⅔ Sick or the COVID Family Leave hour type.  The employee’s full normal salary will not be increased if you use COVID hours.  

Here are some examples of paying a salary employee.  Jane is a salary employee, paid weekly with a salary rate of $1000/week.

Example 1: Partial regular salary, partial COVID 100 Sick leave

In this example, Jane worked 3 days and took 2 days of COVID 100 Sick leave.

Payroll Entry:

• Keep the “Pay” switch “On.”
• Enter 24 regular hours for the 3 worked days.
• Enter 16 COVID 100 Sick hours for the 2 sick days.
• Her gross wages would be $600 Regular + $400 COVID 100 Sick = $1000, which is her full regular pay rate. 

Example 2: Partial regular salary, partial COVID ⅔ Sick Leave

In this example, Jane worked 3 days and took 2 days of COVID ⅔ Sick Leave.

Payroll Entry:

• Keep the “Pay” switch “On.”
• Enter 24 regular hours for the 3 worked days.
• Enter 16 COVID ⅔ Sick hours for the 2 sick days.
• Her gross wages would be $600 Regular + $268 COVID ⅔ Sick = $868, prorating only the COVID hours.

Example 3: Full week of COVID ⅔ Family Leave

In this example, Jane took the entire week off for COVID Family Leave

Payroll Entry:

• Turn the “Pay” switch to “Off.”
• Enter 40 COVID Family Leave hours.  Leave Regular hours blank.
• Her gross wages would be $670, which is ⅔ of her $1000 weekly salary.

Paying Salary Non-Exempt Employees COVID Paid Leave

Salary Nonexempt employees are eligible for overtime pay.  Because COVID hours are non-worked hours, they will not affect or contribute toward the employee’s overtime pay.  If the employee is being paid their full normal salary, any COVID hours would be paid in addition to the salary and will increase the amount.