The ACA
Applicable Large Employer Report uses information from the perpetual
payroll history files to calculate your total number of full-time and
full-time equivalent (FTE) employees for the period-end range and earnings
codes specified when running the report.
The employee counts are based on the number of service
hours accumulated on a monthly basis. Employees who accumulate 130 or
more hours of service per month are considered full-time employees. Anyone
accumulating fewer than 130 hours of service per month is considered a
part-time employee.
Part-time employee hours of service are added together
as part of the calculation to determine your FTE employee count. Based
on Internal Revenue Service (IRS) regulations, no more than 120 hours
of service per month can be counted for a part-time employee as part of
the FTE calculation. Therefore, for employees who accumulate more than
120 hours per month and fewer than 130 hours per month, only 120 hours
are included in the calculation.
The following formula used to determine your monthly
FTE count:
Total hours of service accumulated by all part-time
employees (with a cap of 120 hours per employee) / 120
The result is then rounded to the second decimal
place.
For
example:
|
Employee
|
Hours
of Service for the month of March
|
|
John
|
85
|
|
Susan
|
122*
|
|
Mike
|
70
|
|
Total
|
275
|
*Only 120 of Susan's hours are included in the total
based on IRS guidelines.
275 / 120 = 2.29 (which is then rounded to the nearest
whole number for the monthly FTE count)
FTE count for March = 2
Your monthly full-time and FTE employee counts are
added together to determine the monthly total. To get your average count
for the year, monthly totals are added together and then divided by 12,
and the result is rounded to the nearest whole number. You can then use
the average count to help you determine whether your company qualifies
as an applicable large employer.
Pay Periods that Span Multiple
Months
For ACA reporting purposes, hours of service must
be reported by calendar month; however, hours worked are tracked by pay
period in Sage 100. Therefore, when a pay period spans more than one
month, a calculation is performed to prorate the hours and determine how
many hours are counted toward the total for each month. The formula used
depends on the pay cycle used in Payroll
Data Entry.
For biweekly
pay cycles: If the pay period ending date falls on or between the 1st
and 13th day of the month, a calculation is used to determine how many
hours are assigned to the previous month.
For weekly
pay cycles: If the pay period ending date falls on or between the 1st
and 6th day of the month, a calculation is used to determine how many
hours are assigned to the previous month.
The following formula is used for biweekly and weekly
pay cycles:
Day of period ending date / Days in pay cycle
* Hours worked = Hours counted for the current month
The remaining hours count toward the previous
month's total.
Biweekly
example:
John is paid for 80 hours, and the pay period ending
date is April 4, 2015.
4 / 14 * 80 = 23 (Hours counted for April)
80 - 23 = 57 (Hours counted for March)
Weekly
example:
Susan is paid for 40 hours, and the pay period
ending date is April 3, 2015.
3 / 7 * 40 = 17 (Hours counted for April)
40 - 17 = 23 (Hours counted for March)
Because of the need to prorate the hours worked for
pay cycles that span multiple months, the report calculations will be
more consistent when you generate the report for the maximum 12-month
date range. If the report is generated for a shorter date range, the prorated
hours for some months may not be reflected in the report totals.
Note The ACA Applicable
Large Employer Report is offered as a self-help tool for your independent
use. Sage cannot and does not guarantee the report's accuracy or applicability
to your circumstances. To comply with the Affordable Care Act, hours of
service must be reported by calendar month. Because hours worked are tracked
by pay periods in Sage 100 and pay periods may span more than one
month, a calculation is performed to get an approximate monthly total.
The total is an estimate and may not reflect the actual hours worked.
For specific tax or legal advice, see a professional tax service provider
or an attorney, as appropriate.
