Payroll Deduction Setup

The following instructions should be used for setting up a payroll deduction and setting up and posting an annuity (401K) deduction.


General Ledger

Add a new general ledger account at Accounting / File / Open / G/L Accounts for the payroll deduction. This is usually a liability account, similar to a Federal/State Tax Withholding account. The payroll deduction will post into this account. If this is an annuity, set up another general ledger account for the employer match (if applicable). This will be an expense account similar to a Payroll Taxes expense account. 


Add the new payroll deduction at Accounting / Setup / Preferences / Payroll. Choose the appropriate Exempt from checkboxes. If unsure of what taxes the deduction is exempt from, contact the plan administrator or accountant. Select the new general ledger liability account in the G/L Acct column.  

Edit the employee at Accounting / File / Open / Employees. On the Deductions tab, enter the dollar amount for the deduction. If the deduction is a percent of the wages, enter a percentage and select the Percent column.