Payroll

Payroll With Your Provider

Your co-op runs payroll in its own payroll provider. OwnFold sends the provider your approved hours and books each payroll that comes back, so the ledger, timesheets and members’ capital accounts stay in step. OwnFold never moves money and never files payroll taxes: your provider pays people, and a full-service provider files and pays the taxes. Open Payroll in the sidebar (Business OS, next to People & HR). Finance staff and administrators use it; auditors can read it but change nothing. Pay is private, so nobody else sees this page.

1. Your Payroll Provider

The Overview tab shows the provider your co-op uses, with a link to Settings to change it. Gusto connects to OwnFold directly; with any other provider, hours go out as a file and each payroll comes back in as a report. If you haven’t chosen a provider yet, the Overview lists ones that work well with OwnFold. OwnFold may earn a referral fee from providers you sign up with through those links; it doesn’t change your price.

2. Connecting Gusto

If your co-op uses Gusto, connect it from Payroll, Connect Gusto.

3. Sending Hours

On the Send hours tab, pick the pay period and choose Check hours to see each person’s approved, unpaid regular and overtime hours. Then choose a file layout and Download hours file and mark sent:

• Spreadsheet (works with most providers): one row per person with their payroll employee ID, last name, first name, regular hours and overtime hours. It isn’t any provider’s official layout; when you upload it, match the columns to your provider’s fields. Gusto’s hours import, for example, lets you match columns on upload. Pay amounts are left out on purpose, so an import can’t add them as extra earnings.
• Every shift: one row per approved timesheet entry, with times, rates, pay and who approved it, for your records or a bookkeeper. This is also what the Timesheets page’s payroll export downloads.
• ADP RUN time sheet import: ADP’s published layout for RUN Powered by ADP (a ##GENERIC## V1.0 row, then one row per person and earnings code). Enter your ADP company code, pay frequency and earnings codes (REG and OVT unless your ADP Earnings Codes report says otherwise). People need their ADP employee ID; anyone without one is left out and named.

Hours in the file are marked as sent. Hours already sent are left out next time and listed as a warning, so nobody is paid twice; tick Include hours already sent only to replace a file the provider never received. Each person’s payroll employee ID (their ID in your provider) can be set right on this tab. If you reopen and correct time after sending it, send the correction or fix it in your provider.

4. Importing a Payroll

After payroll runs, download the provider’s payroll register or payroll journal as CSV, one row per person (Gusto, ADP, QuickBooks Payroll, Paychex, OnPay and most others export one). On Import a payroll, choose the file:

1. Columns: OwnFold recognizes common headers (Employee Name, Check Date, Pay Period, Regular Hours, O/T Hours, Gross Pay, Federal Income Tax, Social Security, Medicare, FUTA, SUI, 401(k), Net Pay and many more) and skips report titles and totals rows. Change anything it got wrong, and set any column it didn’t recognize. Columns set to employee taxes, employer taxes or a deduction are added together; a total column is used instead of its parts.
2. Preview: each line shows the member it matched (by the member’s payroll employee ID, then by exact name; “Last, First” works too) and whether they’re an employee or a contractor. Change any match by hand; a payroll ID matched by hand is remembered for next time. Each line is checked: gross pay less employee taxes, deductions and buy-in must equal net pay, to the cent. If the file holds several payrolls, choose which one to book. Fill in the check date or pay period if the file doesn’t give them.
3. Book payroll: the preview shows the exact journal entry first. The same file can’t be booked twice for the same payroll and period, and OwnFold warns if a payroll with the same check date and gross pay is already booked (from Gusto, for example).

5. How a Payroll Is Booked

Approving a timesheet already recorded the wages as owed (debit Direct Labor, credit Accrued Payroll). Booking the payroll pays them, in one balanced entry dated the check date:

• Debit 2100 Accrued Payroll for the wages accrued on the matched members’ approved, unpaid timesheets dated in the pay period. Those timesheets are marked paid.
• Debit 5100 Direct Labor for the rest of gross pay. If more was accrued than paid, this is a credit instead.
• Debit 6200 Payroll Taxes for the employer’s share of taxes.
• Credit 1000 Cash for net pay to employees, for contractor payments, and for employee and employer taxes when your provider pays them, each on its own line.
• Credit 2150 Payroll Withholdings & Deductions Payable for other deductions (benefits, retirement, garnishments) until they’re paid over. If you tick We pay payroll taxes ourselves, the employee and employer taxes are credited here too instead of to Cash; the choice is kept in the payroll’s notes.
• Credit 3000 Member Capital Accounts for buy-in deductions (below).

Contractors are booked to Direct Labor with no payroll taxes and kept separate on the payroll’s lines; Payroll history totals each contractor’s pay by year for their 1099-NEC. A payroll dated in a closed period can’t be booked. To fix a mistake, open the payroll in Payroll history and choose Void payroll with a reason: its entry and capital credits are reversed, its timesheets go back to approved and unpaid, and the corrected payroll can then be booked.

6. Buy-In Deductions

If members pay their buy-in through payroll deductions, an administrator enters the deduction’s name, exactly as your provider shows it, on the Overview. Imported payrolls credit that column to each member’s capital account the same way a recorded capital contribution is: a capital account entry, a higher capital balance, and progress toward their class’s buy-in. A line with a buy-in deduction must be matched to a member. Voiding the payroll takes the credit back.

7. Guaranteed Payments

In a co-op taxed as a partnership (Settings, tax treatment), members generally can’t be its employees, so they’re usually paid for their work through guaranteed payments rather than wages: no payroll withholding, and the payments go on each member’s Schedule K-1 (box 4a). This is general information, not legal or tax advice; have your accountant confirm how your co-op should pay members. The Guaranteed payments tab appears for these co-ops:

• Record each payment once it’s paid: member, amount, paid on, the period it covers and how it was paid. Tick Settle this member’s approved, unpaid time in the period to mark that time paid.
• It’s booked as debit 2100 Accrued Payroll for the settled time, debit 5150 Guaranteed Payments to Members for the rest, and credit 1000 Cash for the payment. A payment can’t settle more accrued time than it pays.
• Each member’s guaranteed payments for the year appear on their K-1 worksheet (Capital, K-1 worksheets) as box 4a and in its XML export.
• Void a payment recorded by mistake, with a reason: its entry is reversed and its timesheets go back to approved and unpaid.

8. Matching the Bank Withdrawals

Your provider withdraws net pay and taxes from the co-op’s bank, usually as separate withdrawals, and a booked payroll already has a cash line for each. When those withdrawals arrive in Finance, Bank Feed & Reconcile, select each one and choose Match next to the payroll line of the same amount: nothing new is posted and the money is counted once. Don’t categorize a payroll withdrawal to an account, which would count it twice. If your provider takes several amounts in one withdrawal so no single line matches, choose Ignore (transfer or duplicate) for it. Provider subscription fees aren’t part of the payroll; categorize them as an expense as usual.