How To Setup And Calculate Washington Worker’s Compensation




Washington worker’ compensation is an insurance that provides no-fault industrial insurance coverage for most employes and workers of labor and industries in Washington State. If you are an employee or worker in Washington you need to apply worker’s compensation taxes.

How to set up  Washington workers compensation

Obtain your rates

WA Department of labor and industries sends you a rate notice which contains your WC rates. You can check the WA verify workers’ compensation premium status: account business website, enter UBI account number, and your rates will be displayed under risk classification.

How to enter WC information into Intuit Online Payroll/QuickBooks online payroll

Open the  WA WC Tax setup window.

  • Choose setup, then select Tax setup(for QuickBooks online payroll: select employees, go to payroll setup, then select tax setup).
  • Select the WA workers compensation tax and enter the following information:
    • Class: first 4 digits of the class code, before the hyphen.
    • Subclass: a second set of digits, after the hyphen on the class code.
    • Nature of work: listed as the class code description on the rate notice.
    • Composite rate: employer+employee=The total rate.
    • Payroll deduction: this is the employee rate and determines what is withheld from employee checks.
    • Effective date.

Important

  •  QuickBooks automatically calculates the employer rate by subtracting the payroll deduction rate from the composite rate.
  • You should not delete the WA WC rate. You can only delete it if it is filled incorrectly or you have not created it.

Assign WC Classes to employees

You can not assign more than 1 class per employee, which means you can only use 1 WC rate per employee.

Intuit Online Payroll

  • Go to Employees.
  • Choose the employee’s name.
  • Go to the Taxes and Exemptions section, click on Edit.
  • Go to the Workers’ Compensation Information section, choose from the Class and Subclass drop-down and make your selection. For more help in completing these fields, you can see the Setup section above.
  • Select OK.

QuickBooks Online Payroll

  • Go to the left menu and Select Workers, then choose Employees.
  • select the employee’s name.
  • Click on the Pencil icon beside the Pay section.
  • Scroll down and select Enter Workers’ Compensation Information.
  • Enter the information required, then select Done. If you need more help in completing these fields, you can see the Setup section above.

Filing Form WA F212-055-000

  • You can submit your quarterly report for industrial insurance during the month following the quarter-end.
  • You can use intuit worksheet as a guide to complete the original form F212-055-000 sent to you by the L&I agency and will also certain the exact due date.
  • Do not submit the worksheet because L&I will submit only the original form.

Calculate Workers’ Compensation

Hourly employees

  • Use the actual worked hours during the calculation.
  • Workers’ Compensation = Rate x Hours Worked
Payroll Deduction
  • Worked hours during the pay period x payroll deduction rate=amount withheld from the employees check.
Company Contribution
  • Composite rate – Payroll deduction rate = Employer rate

Commission Employees

Notes: Use the actual worked hours during the calculation.

  • QuickBooks doesn’t support the WC calculation for an employee who is primarily hourly but receives the secondary commission pay that has hours attached.
  • Online Payroll requires hours to be entered in addition to commission pay. The Workers Compensation calculation is based on the worked hours entered and the calculation is the same as done in hourly employees.

Salaried employees

  • Workers Compensation = rate x 160 hours per month.
  • Workers Compensation is calculated on the first check of the month only.
  • The salaried employee worked hours are calculated at 160 hours per month, and 480 hours per quarter. Online Payroll calculates WC on the employee’s first paycheck of the month.

Example 1:

  • Check dated 01/01/2012
  • 86.67 hours are worked during the pay period.
  • Payroll deduction rate: 0.59695
  • Composite rate: 3.3423

Payroll Deduction

160 x 0.59695 = 91.12 (amount withheld from the employee’s check)

Company Contribution

  • Composite rate (3.3423) – Payroll deduction rate (0.59695) = Employer rate (2.74535)
  • 160 x 2.74535 = 439.26

Conclusion

I hope this guide will help you to create, set up and calculate workers’ compensation in Washington. If you still have some doubts or queries you can hire QuickBooks Proadvisor from Wizxpert or you can contact their QuickBooks error support team. A team of QuickBooks Pro-Advisors is full time available for you to get rid of QuickBooks issues.






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