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Managing Departments in Payroll

Learn how to set up departments and assign to work locations and employees. You can assign more than one a department to an hourly employee per role, or allocate a salaried employee to multiple departments.

Available to Basic Payroll, Full Service Payroll

You can set up and manage departments. This will allow you to classify your employee payroll by groups and report on dollars per department. If you have Accounting, you can also Manage Departments in Accounting

Setting Up Departments in Payroll

  1. Go to Settings > Company Settings > Manage Departments

  2. Click Add New.

  3. Enter the department name, up to 50 characters.

  4. If you have both Accounting and Payroll, you will need to indicate that this department should be used in Payroll by checking Use in Payroll. Otherwise, it will only be used in Accounting.

  5. If you have more than one work location, select the locations this department can be used.

  6. Click Save.

The departments you set up at the company level can now be assigned to work locations first and then employees.

Assigning Departments to Employees

To properly report employees by department, you must assign at least one department to each employee. Departments are assigned on the employee’s Pay Info screen.

How to Assign Departments to Hourly Employees

Any additional money paid to hourly employees, such as a bonus, will be allocated to the employee’s primary department, which is shown in the first row.

  1. Go to Payroll > Employee List > Click Employee Name > Pay Info > Edit.

  2. For each pay rate assigned to the employee, select a department from the dropdown list.

    • You may assign different departments to each role.

    • If the employee has multiple roles, you can assign the same department if needed.

    • If you need to assign multiple departments for the same role, you will need to enter a unique role description for each.

  3. Click Save.

Each pay rate and department is displayed in the side-drawer on Payroll step one. To change the department for an hourly pay rate during payroll

  1. Hover over the employee rate on payroll Step 1.

  2. Click Edit.

  3. Choose a different department for any rates in the side drawer. See How to Change an Hourly Pay Rate During Payroll.

How to Assign Departments to Salary Employees

  1. Go to Payroll > Employee List > Click Employee Name > Pay Info > Edit.

  2. Click Add A Department to assign a department to this employee.

    • You may assign an unlimited number of departments to salaried employees.

    • Any additional money paid to salary employees, such as a bonus, will be allocated to the employee’s primary department, which is shown in the first row.

  3. If you have assigned more than one department to a salaried employee, choose your department salary allocation preference.

  4. You can also update the allocation on a per payroll basis.

    1. To change how a salaried employee's pay is split across departments during payroll, hover over the employee's pay rate in the Rate column on payroll Step 1, or over any of the employee's department amounts, and click Edit.

    2. In the side drawer, use the Department Allocation section to enter the split by percentage (must total 100%) or by dollar amount (must total the per-pay-period salary).

    3. Choose This payroll only to change the split for this payroll, or This and future payrolls to save the new split to the employee's Pay Info record.

    4. Click Apply to Payroll. This works whether the employee is set to "Allocate on a payroll-to-payroll basis" or "One-time, ongoing allocation." See How to Change a Salaried Employee's Pay During Payroll or How to change an Hourly Pay Rate During Payroll .

  5. Click Save.

How Departments Work in Payroll

Allocating multiple departments for hourly employees

After payroll is run, you will be able to view a breakdown of your department dollars on the Departments in Payroll Report.

How to Edit a Department Name

  1. Go to Settings > Company Settings > Manage Departments.

  2. Click the Edit icon.

  3. Change the name of the department.

  4. Click Save.

Any prior transactions that used this department will be updated with the new name.

How to Inactivate a Department

You can only delete a department if it has not been used in a payroll or assigned in an accounting transaction. Otherwise, follow the instructions to make the department inactive.

  • Go to Settings > Company Settings > Manage Departments.

  • Click the “Edit” icon.

  • Uncheck the “Active” box.

  • Click “Save.”

If a department has not been used in payroll or assigned to an accounting transaction, click the trashcan at the end of the row.

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