SOP: Payroll Step 4

Learn how to process payroll including PTO payouts, insurance premium refunds, and incentive hours with detailed, step-by-step instructions. Perfect for payroll administrators and HR professionals.

March 30, 2026 By Jessica Esslinger

In this guide, you’ll learn how to process regular hours, handle PTO payouts, and issue insurance premium refunds. It also covers how to enter incentive hours for case management and ensure all payroll adjustments are accurate. This step-by-step approach helps maintain accurate records and ensures employees are paid correctly.

Let's get started!

To continue our payroll training, we left off with Ava Marie Jordan. We need to pay her for 16 regular hours from her timecard and pay out 40 hours of PTO. We will return later to process the refund of insurance premiums.

Step #2: Click on "Refund insurance premiums totaling $ 839.28" — Click on "Refund insurance premiums totaling $ 839.28"

We will add a worksheet.

Step #4: Click on "Add worksheet" — Click on "Add worksheet"

whoops... Read NHAA.

Step #5: Double-click on "← Back" — Double-click on "← Back"

Yes. Add a worksheet. We will add PTO payout.

Step #6: Click on "Add worksheet + Add time / time off worksheet" — Click on "Add worksheet + Add time / time off worksheet"

Next.

Type "Ctrl + C"

Step #13: Click on "Next >" — Click on "Next >"

We are only in the in 'active employees.' We need to select all employees. Search for Ava Marie, submit.

Step #14: Click on "Search by name" — Click on "Search by name"

Step #15: Click on "< status is active >" — Click on "< status is active >"

Step #18: Click on "Submit" — Click on "Submit"

We can do 40 hours.

Her rate code—okay, so this is a good example.

She does not have a rate code, which means her standard hours were not entered. This is okay. We will go to her profile quickly.

Step #22: Double-click on "300017" — Double-click on "300017"

We need to ensure her standard hours are set to 80. Go to regular pay and enter 80.

Step #23: Click on "Eva Marie S" — Click on "Eva Marie S"

Step #24: Click on "002341" — Click on "002341"

Step #25: Click on "Regular Pay >" — Click on "Regular Pay >"

Type "80"

Step #28: Click on "Biweekly" — Click on "Biweekly"

Effective August 1st, select the rate change reason as "adjustment," then click save.

Step #29: Click on "mm / dd / yyyy" — Click on "mm / dd / yyyy"

Step #30: Double-click here — Double-click here

Step #34: Click on "Save" — Click on "Save"

Go back to the manage payroll dashboard. Then, return to the PTO payout section. Here, you can see the rate code is two, and we will pay out 40 hours.

Step #35: Click on "← Back to Manage Regular Payroll" — Click on "← Back to Manage Regular Payroll"

Step #36: Click on "Wrksh004" — Click on "Wrksh004"

Step #37: Double-click here — Double-click here

Step #41: Double-click here — Double-click here

Save, auto-balance, and done.

Step #42: Click on "SAVE" — Click on "SAVE"

Step #43: Click on "AUTO BALANCE" — Click on "AUTO BALANCE"

Step #44: Click on "DONE" — Click on "DONE"

Next one is...

I just want to double-check, because sometimes a PTO payout is in hours or amounts.

Step #46: Click on "Wrksh004" — Click on "Wrksh004"

We want to double-check that this is correct. PTO payout hours.

Step #47: Drag "PTO Payout ..." — Drag "PTO Payout ..."

Okay.

That looks good.

Step #49: Click on "DONE" — Click on "DONE"

Next, pay 16 regular hours from the timecard.

We will look at the timecard.

We will look at Ava Marie.

Step #53: Click on "Search Employee by File # or Name" — Click on "Search Employee by File # or Name"

She has 16 hours. That looks great.

Type "eva"

Next, we will refund her insurance premiums.

Here they are.

It's a lot, so get ready! Go back to Manage Regular and click Add Worksheet.

Step #60: Click on "← Back to Manage Regular Payroll" — Click on "← Back to Manage Regular Payroll"

Step #61: Click on "+ Add worksheet + Add time / time off worksheet ± Import file" — Click on "+ Add worksheet + Add time / time off worksheet ± Import file"

Go to adjust deduction.

Step #62: Click on "Select one ..." — Click on "Select one ..."

Step #63: Click on "Deduction - Adjust" — Click on "Deduction - Adjust"

Click Next.

Type "Ctrl + C"

Type "Ctrl + V"

Step #68: Click on "Next >" — Click on "Next >"

You could put all of this on one large worksheet if you wanted, but I find it easier to do it this way since everything is already created for you.

Step #69: Click on "Next >" — Click on "Next >"

Step #72: Click on "Search by name or posi" — Click on "Search by name or posi"

Ava Marie Jordan, submit.

Type "eva"

Step #74: Double-click here — Double-click here

Step #75: Click on "Submit" — Click on "Submit"

We have a lot to add, so I will...

Flip the screen.

We need to select Accident, then Tab, then Tab, and finally Critical Illness.

Dental FSA should be available, so we don't have to continue...

Type "acc + Tab + Tabcre + Tab + Tabden + Tab + Tab"

We don't have to do that one. Life, spouse life, LTD, medical, STD, and vision. We need to pay out a total of 839.

Type "lif + Tab + Tablis + Tab + Tabltd + Tab + Tabmed + Tab + Tabstd + Tab + Tabvis"

Step #82: Click on "0.00" — Click on "0.00"

Step #83: Double-click on "." — Double-click on "."

I'm going to do some calculations here.

I am taking it line by line all the way down, then rooting down.

Type "6.39 + Enter"

Type "44.19 + Enter"

Type "22.41 + Enter"

Type "17.42 + Enter"

Type "5.28 + Enter"

Type "22.38 + Enter"

Type "131.67 + Enter"

Type "23.26 + Enter"

Type "6.76 + Enter"

Step #96: Click on "% 9" — Click on "% 9"

Step #98: Click on "$ % 950000" — Click on "$ % 950000"

Step #99: Click on "6.76" — Click on "6.76"

Subtotal is 279, 2, 4, 6, 8. She said about 800, so that's probably four.

Step #100: Click on "AutoSum" — Click on "AutoSum"

101

Type "Enter"

Step #102: Click on "279.76" — Click on "279.76"

Let's see if it's four payments.

106

Type "+*4 + Enter"

Step #107: Click on "25.56" — Click on "25.56"

Scroll down to check if that is the correct amount.

Step #109: Click on "279.76" — Click on "279.76"

Step #110: Double-click on "279.76" — Double-click on "279.76"

Step #111: Double-click here — Double-click here

Step #112: Click on "1,119.04" — Click on "1,119.04"

No, so we will try three.

Step #113: Click on "25.56" — Click on "25.56"

839.28, so that's three premiums.

115

Type "Backspace"

116

Type "Enter"

Step #119: Drag "839.28" — Drag "839.28"

120

Type "Ctrl + B"

These are the amounts, and we know they are in order. Next, we will switch the screen, scroll over, and start entering our adjustments.

Step #123: Double-click here — Double-click here

Step #124: Drag "0.00 Show by co .... 0.00 Enter by co .. 0.00" — Drag "0.00 Show by co .... 0.00 Enter by co .. 0.00"

-19.17, -132.57, 23. If you want to place them next to it, you can, but I will trust myself. 84, negative 67.14. Whoopsies.

126

Type "-19.17 + Tab + Tab-132.57 + Tab + Tab-67.23 + Tab + Tab-52.26 + Tab + Tab-15.84 + Tab + Tab-67.14 + Tab + Tab-67.14 + Tab-69*8 + Tab"

Step #127: Click on "-67.14 -698" — Click on "-67.14 -698"

Something might be off. There we go.

Step #129: Click on "-67.14 -698" — Click on "-67.14 -698"

See, I just start...

130

Type "Ctrl + A"

I was going too fast. Okay.

Let's see where I made a mistake. 60 medical is actually this one.

Step #133: Click on "395.01" — Click on "395.01"

That's why you should not trust yourself.

We have Accident, Clinical Illness, Dental, and Life at 1742.

Step #135: Drag "Show by co" — Drag "Show by co"

52. Next, we have Life Spouse, 1584.

Step #137: Drag "-132.57" — Drag "-132.57"

And then... Right. Yep. Then 6714—it looks like I tried to enter it twice.

Step #139: Drag "-15.84" — Drag "-15.84"

Step #140: Click on "-67.14" — Click on "-67.14"

This is negative 395.01. After Medical was STD, which is negative 6978.

141

Type "-395.01"

Vision is negative 2028. Now we will save and select Autobalance. Done.

143

Type "std + Tab-69.78 + Tab + Tab-20.28 + Tab"

Step #145: Click on "AUTO BALANCE" — Click on "AUTO BALANCE"

Step #146: Double-click on "DONE" — Double-click on "DONE"

I always double-check at the end in our payroll report, so I won't triple-check it now. I'll review it at the end to ensure we are not double-dipping.

Step #150: Drag "DEN - DEN PRE TAX" — Drag "DEN - DEN PRE TAX"

Put it back.

Okay.

Step #152: Click on "3/10/26" — Click on "3/10/26"

That looks great. We will not refund FSA for her notes. That looks good.

Step #154: Click on "Back to Payroll Dashboard" — Click on "Back to Payroll Dashboard"

All right. Now that we have entered all the notes for Payroll, we will check if there are any hours for Case Management, which there usually are.

We will go to the folder where I saved it from Gail. That's what I think.

Step #161: Double-click on "10- RES ManageAbility" — Double-click on "10- RES ManageAbility"

Step #162: Double-click on "RES Payroll Posting ( 2026 )" — Double-click on "RES Payroll Posting ( 2026 )"

I'm going to open this up.

Step #163: Double-click on "Ck 03.27.26" — Double-click on "Ck 03.27.26"

Step #164: Double-click on "Backups" — Double-click on "Backups"

Step #165: Double-click on "01.23.26 - 03.22.26 CM Hours for Payroll" — Double-click on "01.23.26 - 03.22.26 CM Hours for Payroll"

We will enter these incentive hours into Payroll. Let me try splitting the screen to make it easier. Okay.

Go to Manage Ability, then select Manage Payroll.

Step #167: Click on "payroll" — Click on "payroll"

From here, select Add Worksheet.

Step #168: Click on "+ Add worksheet" — Click on "+ Add worksheet"

Do I have an Incentive Payment?

Step #169: Click on "Select one" — Click on "Select one"

I lied.

Step #171: Click on "← Back" — Click on "← Back"

"" This one is a little different. Go to Other Actions, select Manage Saved Worksheets, then choose Incentive Hours Worksheet number four and click Create Worksheet.

Step #172: Click on "Other actions ▼" — Click on "Other actions ▼"

Step #173: Click on "Manage saved worksheets" — Click on "Manage saved worksheets"

Step #175: Click on "Create worksheet" — Click on "Create worksheet"

Label this as Incentive Hours.

This saves everyone's name for us, so we don't have to click each name in the template.

177

Type "Incentive ours"

Step #178: Click on "Incentive purs" — Click on "Incentive purs"

179

Type "H"

Step #180: Click on "Next >" — Click on "Next >"

Click Next.

Step #181: Click on "Next >" — Click on "Next >"

Because you chose to proceed with a previous worksheet, the employees were already selected. This is correct.

We will click Submit.

Step #183: Click on "Submit" — Click on "Submit"

Okay.

Here, we need to enter everyone's rate code, pay number two, and the tax frequencies first. To do that in bulk, go to Options and select Fill Column.

Step #185: Click on "OPTIONS ▾" — Click on "OPTIONS ▾"

Step #186: Click on "Fill Column" — Click on "Fill Column"

We will select Overwrite All Cells.

Step #187: Click on "Overwrite all cells" — Click on "Overwrite all cells"

We will process pay number two, which will be issued on a separate paycheck.

The tax frequency will always be C, which stands for supplemental wage bonus.

Step #193: Click on "C - Supplemental Wage Bonus" — Click on "C - Supplemental Wage Bonus"

Don't make mistakes, as they will notice. From there, click Done.

Step #194: Click on "DONE" — Click on "DONE"

You can see it does everything for you. Rate code: we have to check or select each one individually. I prefer to do this all at once to see if anyone is missing a rate code, although everyone should have one.