Setting UP Payroll Deductions
Payroll processing under QuickBooks Payroll software is completed automatically with the least number of mistakes as opposed to the higher scope of errors found with manual payroll processing.
Once the user has set the information for additions, compensations, deductions, and expenses of the company within the software, QuickBooks Payroll electronically tracks and calculates the items under payroll for accurate salary along with incentives of the employee.
Initial setting up of data of payroll items is required after which the software processes payroll for employees on its own in time to process salary and incentives along with bonuses to employees’ accounts. Deductions are also an imperative part of payroll and each item of the payroll is created separately for every deduction.
Some examples of payroll deductions are union dues, employee-paid insurance, etc. Users can also discuss payroll requirements dial the QuickBooks Payroll Support Phone Number and explore more options.
How To Enter Payroll Deductions In QuickBooks
The first step where Payroll Deductions are concerned is defining them properly within the system.
To do so with QuickBooks Online Payroll software follow the given instructions:
- Open the software and select the tab labeled Employees located on the left side of the window and then further select the particular employee.
- Locate the Pay tab and click on the icon in the shape of the pencil.
- Now scroll through the window and select the tab – Add New Deduction.
- Click on the appropriate type and category of the deduction.
- Next, you have to write down the appropriate description of the deduction.
- Provide the noted amount and then click on ‘done’.
Another imperative aspect of Payroll Deduction is to be aware of our different categories which two main are listed below:
1. Pre-Tax Payroll Deductions:
As per the laws set under federal and state government, there are items of paycheck deductions that are categorized under Pre-tax only. This result in a reduction in the employees’ wages before other tax calculations are performed which invariably reduces tax paid by the employer. The two kinds of Pre-tax deductions are:
- 401 (K) Plan – it is considered to be a type of qualified retirement plan deduction which renders federal income tax paycheck deduction non-applicable. They are, however, liable for Federal Unemployment taxes, Social Security, and Medicare. Find more How To Setup QuickBooks Payroll 401k.
- Cafeteria Plan – This deduction also goes by the name Section 125 plan through which employees of the company can make payments for dental, vision, and medical insurance premiums along with a pretax deduction in the paycheck. These amounts paid are exempted from not only Federal Income Tax but also Medicare, Social Security, and Federal Unemployment taxes.
2. Voluntary Deductions:
Paycheck deduction of employees under voluntary deductions encompasses both post and pre-tax like medical, vision, and dental insurance premiums as well as flexible spending accounts, loan repayments, cash advance, retirement plans, etc.
Different Types of Supported Deductions
- Health Insurance – Taxable or Pretax: Medical Insurance, Dental Insurance, Vision Insurance
- Retirement Plans – Varies: 401(k), SIMPLE 401(k), 403(b), SARSEP, SIMPLE IRA, Company-only plan, Roth 401(k), Roth 403(b), and catch-ups
- FSA Plans – Pretax: Dependent Care FSA and Medical Expense FSA
- HSA Plans – Taxable or Pretax: Taxable HSA and Pretax HSA
- Other Deductions – Taxable: Cash Advance Repayment, Loan Repayment, other after-tax deduction