Payroll Management
DiverDash provides a comprehensive payroll system that automates staff payment calculations, tax withholdings, and financial journal entries. This system handles everything from time tracking to final payment processing with full accounting integration.
What You'll Learn
How to set up and manage pay periods
How to process time entries and calculate staff earnings
How to generate, approve, and process payroll runs
How to handle tax withholdings and deductions
How to manage the complete payroll-to-accounting workflow
Before You Start
Make sure you have:
Staff records properly configured (staff onboarding guide)
Appropriate permissions (
PAYROLL_MANAGEandFINANCE_MANAGEfor processing)Chart of accounts set up with standard payroll accounts
Time entries submitted and approved for the pay period
Understanding the Payroll Workflow
DiverDash uses a structured payroll process with these key stages:
1. Pay Period Management
Draft: Initial creation of pay period
Processing: Payroll calculations in progress
Completed: All calculations finished, ready for approval
Paid: Payroll run processed and financial entries created
2. Earnings Collection
The system automatically collects earnings from multiple sources:
Time Entries: Regular and overtime hours from approved timesheets
Activity Earnings: Additional compensation from specific activities
Commission Earnings: Sales-based compensation
Salary Accruals: Fixed salary amounts (when applicable)
3. Automatic Calculations
Gross Pay: Sum of all earnings sources
Tax Withholdings: Federal (15%), State (5%), Social Security (6.2%), Medicare (1.45%)
Benefit Deductions: Employee contribution amounts
Net Pay: Final take-home amount after deductions
Creating and Managing Pay Periods
Step 1: Create a New Pay Period
Navigate to Payroll → Pay Periods
Click "New Pay Period"
Complete the pay period form:
Name: Descriptive name (e.g., "January 2024 First Half")
Start Date: First day of the pay period
End Date: Last day of the pay period
Pay Date: When payment will be issued (must be on or after end date)
Notes: Optional description or special instructions
Step 2: Validate Pay Period Settings
The system automatically validates:
End date is on or after start date
Pay date is on or after end date
No overlapping pay periods exist for your company
All required fields are completed
Step 3: Monitor Pay Period Status
Track your pay period through these statuses:
Draft: Ready for time entry collection
Processing: Payroll calculations in progress
Completed: Ready for final approval and processing
Paid: Financial transactions completed
Processing Payroll Runs
Step 1: Access Payroll Processing
Navigate to Payroll → Pay Periods
Find your pay period and click "Process"
This opens the comprehensive payroll processing workflow
Step 2: Review Time Entries
Time Entries Tab:
View all approved time entries for the pay period
See regular hours, overtime hours, and rates
Filter by staff member or approval status
Verify hours are accurate before proceeding
Key Time Entry Details:
Only approved time entries are included in payroll
Overtime is automatically calculated (1.5x rate over 40 hours/week)
Different pay types (hourly, salary) are handled appropriately
Step 3: Generate Payroll Draft
Click "Calculate Payroll" to generate draft payroll items
The system collects earnings from all sources:
Approved time entries
Activity-based earnings
Commission payments
Salary accruals
Automatic Calculations Include:
Hours Worked: Regular and overtime hours totaled
Gross Pay: All earnings sources combined
Federal Tax: 15% default rate (configurable per staff)
State Tax: 5% default rate
Social Security: 6.2% on wages up to limit
Medicare: 1.45% on all wages
Benefits Deduction: From staff benefit configurations
Net Pay: Final amount after all deductions
Step 4: Review Payroll Results
Payroll Results Tab:
Review calculated amounts for each staff member
Verify tax withholdings and deductions are correct
Check totals and ensure they balance properly
Use detailed breakdown accordion for line-by-line review
Key Review Points:
Gross pay matches expected earnings
Tax rates are appropriate for each employee
Benefit deductions match staff configurations
Net pay calculations are accurate
Step 5: Process Final Payroll Run
Confirm and Post Tab:
Review final payroll summary with totals
Verify all amounts are correct
Click "Process Payroll" to finalize
What Happens During Processing:
Creates a balanced financial transaction with:
Debit: Wages Expense account (7000-Wages) for gross pay
Credit: Payroll Tax Payable (2100-PayrollTaxPayable) for taxes
Credit: Cash account (1010-Cash) for net pay
Updates pay period status to "paid"
Links all payroll items to the financial transaction
Creates audit trail for the payroll run
Managing Staff Payroll Configuration
Default Pay Rates
Each staff member has a defaultPayRate that serves as their base hourly wage:
Used for time entry calculations
Applies to regular hours (first 40 hours per week)
Overtime automatically calculated at 1.5x this rate
Employment Types and Pay Types
Configure staff with appropriate settings:
Employment Type: Full-time, Part-time, Contract
Pay Type: Hourly, Salary, Commission
Tax Withholding: Custom percentage if different from defaults
Tax Profile Configuration
Set up individual tax settings:
Federal Tax Rate: Override default 15% if needed
State Tax Rate: Override default 5% if needed
Contractor Flag: Skip employee taxes for contractors
Benefits Eligibility: Include in benefit deductions
Understanding Financial Integration
Chart of Accounts Setup
Payroll processing requires these standard accounts:
7000-Wages: Wages Expense (Debit for gross pay)
2100-PayrollTaxPayable: Payroll Tax Payable (Credit for taxes)
1010-Cash: Cash/Bank (Credit for net payments)
Transaction Structure
Each payroll run creates a balanced journal entry:
Audit and Tracking
Every payroll run links to its financial transaction
All payroll items reference the source transaction
Complete audit trail from time entries to final payment
Voiding capability with reversing transactions
Advanced Payroll Features
Batch Approval
Approve multiple payroll items at once
Filter by pay period or individual selection
Bulk status updates for efficiency
Payroll Analytics
Access comprehensive reporting:
Pay period summaries with staff breakdowns
Year-to-date earnings by employee
Tax withholding summaries
Historical payroll run data
Voiding Payroll Runs
If correction is needed:
Void completed payroll runs
Automatic creation of reversing financial transactions
Reset payroll items for reprocessing
Maintains complete audit trail
Troubleshooting Common Issues
Missing Time Entries
Problem: No payroll items generatedSolution:
Verify time entries are submitted and approved
Check pay period dates include relevant time entries
Ensure staff have time entries in the system
Incorrect Tax Calculations
Problem: Tax amounts don't match expectationsSolution:
Check staff tax profile settings
Verify contractor flag for non-employees
Review default tax rates in system configuration
Payroll Won't Process
Problem: Cannot finalize payroll runSolution:
Ensure you have both
PAYROLL_MANAGEandFINANCE_MANAGEpermissionsVerify pay period is in correct status (not already paid)
Check that required chart of accounts exist
Unbalanced Transactions
Problem: Financial transaction doesn't balanceSolution:
System automatically balances by adjusting cash amount
Review payroll calculations for accuracy
Check for rounding issues in calculations
Next Steps
After completing payroll processing:
Generate financial reports to analyze payroll costs
Process customer payments to maintain cash flow
Review equipment inventory for operational needs
Plan dive operations with proper staffing
Getting Help
Review staff pay configurations in Staff Management
Check time entry approval status before processing
Verify chart of accounts setup for proper financial integration
Contact system administrator for permission issues
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