Setup: Payroll Standard Deductions Setup: Payroll Standard Deductions
Standard Deductions are repeating deductions that should automatically be deducted from the employee's wages each week. Examples might be Health Insurance, Charitable Contributions, wage garnishments, or Credit Union. The name, method of calculation (hourly, Percent, or Flat Amount), the General Ledger Liability Account into which deducted amounts are accrued, and the limit basis for all deductions are specified in the Add or Change a Standard Deduction screens. They are the same for all employees. The rate, the limit amount, the week to date and year to date values of each deduction may vary from employee to employee and are specified by employee through Employees in the Payroll Main Menu.
This screen can be accessed by selecting Setup > Accounting Options > Payroll > Standard Deductions. It can also be accessed by right-clicking the PR menu icon.
Add or Change (button)
See Add or Change a Standard Deduction.
Press the Delete button and the following screen comes into view. Press the Yes button and the highlighted record will be deleted and the previous screen comes into view. If the No button is pressed, the program returns to the previous screen.
This button closes the program and returns to the Main screen.
Help (button)
see How to use Help
Add or Change A Standard Deduction
Press the Add or Change button and the following screen will come into view.
Enter the number of the deduction.
Enter a description for the deduction.
Enter up to 6 characters for a shorthand description of the deduction. This is the description which will be printed on the check stub.
Enter the General Ledger account to which this deduction is to be credited.
There are four types of deductions available: Flat Amount, Percent of Gross, Percent of Net and Amount per Hour. Use the arrow to choose the correct type.
The deduction limit may be based upon either the total amount of the deduction or the total accumulated annual Gross Pay. If Gross Pay is selected and the limit in the employee file is set to $10,000.00, this deduction will be taken until the employee's year to date gross reaches $10,000.00 at which time this deduction will no longer be taken. If Deduction is selected and the limit in the employee file is set to $250.00, this deduction will be taken until the year to date deducted amount reaches $250.00.
This is the limit that will be used as a default when this deduction is added to an employee record.
Treat deduction limit as a remaining balance (check box)
This setting will only be enabled if the limit is based on the deducted amount. If this box is checked, the limit in the employee file will be reduced by the amount of the deduction each time a deduction is taken. For example, let's say the limit is set to $250.00 in the employee record and the deduction rate per pay period is set to $50. If this box is checked, the first week payroll is processed, $50.00 will be deducted from the employee's pay and the limit will be reset to $200.00.
The box should be checked if this is a deduction for employee advances or loans.
Enter the Box type that applies to this deduction on the W2 form. Click on the down arrow to select from a list of box types. Select from the following options:
None
A
B
C
D 401(k)
E 403(b)
F 408(k)(6)
G 457(b)
H 501(c)(18)(D)
J
K
L
M
N
P
Q
R MSA
S 408(p)
T
V
W HSA
Y
Z
AA Roth 401(k)
BB Roth 403(b)
DD Heath Coverage
EE Roth 457(b)
Certified Payroll Assessment (check box)
If this box is checked, this deduction will show up on page 1 of the Certified Payroll Report Statement of Compliance under assessments.
Direct Deposit Deduction (check box)
If the employee has direct deposit, when the check is deposited, the money is taken from the employees net amount and put directly in the specified account. For example: The amount of the paycheck is $500.00. The employee wants $450.00 to go into a checking account and $50.00 to go in a savings account. This will be an employee specified account.
Section 125 Deduction (check box)
Check this box if this deduction meets the requirements of a Section 125 payroll deduction.
|
Federal Tax |
Social Security |
|
Medicare |
Federal Unemployment |
|
State Tax |
State Unemployment |
|
Workers Comp |
General Liability |
|
Local Tax |
Disability Insurance |
Each deduction may be excluded from eight possible options. Check the options that are desired for exclusion. If no options are checked, the deductions will be processed after all taxes have been subtracted from the gross.
For example: a 401K plan may be exempt from Federal and State Tax, but not exempt from FICA. By selecting Federal Tax and State Tax, such a deduction would be subtracted from the gross pay before the Federal and State Taxes are subtracted from the gross pay, but not before FICA is subtracted. Cafeteria plans can be any combination of the eight possible deductions.
IMPORTANT NOTE: Regarding Non-Taxable Deductions such as 401k and Percent of Net Deductions
Deductions which are designated as Percentage of Net deductions cannot, by nature also be flagged as Non-Taxable. The very nature of a Percentage of Net deduction is that it cannot be calculated until the computer has calculated the Net Pay amount. The nature of a Non-Taxable deduction is that its deduction value is subtracted from the Gross Pay amount in order to determine the Net Pay amount. It is for this reason that the system will not allow a deduction to be flagged as both Non-Taxable AND as a Percent of Net deduction.
Employer Match (check box)
If the employer matched this deduction, check this box.
Match Amount
Enter the percentage of the total deduction the employer will match.
Match Limit
The deduction limit may be based upon either a Percentage of Gross or a Flat dollar amount. Use the radio button to choose the correct type. For example: the employer portion of this deduction is a flat amount of $200.00.
Base Limit on YTD (check box)
Check this box if the match limit needs to be based on the amount deducted or employee gross year to date, as opposed to basing it on the deduction amount and gross for the pay period being processed.
Account
Enter the General Ledger account to which this deduction is to be credited.
Payment of Deducted Amounts
This area is used to identify the Vendor to whom Employer contributions will be paid and to select an Invoice Batch in which the payments will be posted.
Vendor ID
Select the Vendor ID to whom deductions for this Standard Deduction should be paid. Press the lookup button to Select the Vendor ID from a list of Vendors.
Batch ID
Select the Batch ID where automatically created Invoices will be placed for transactions involving this Standard Deduction.
When the system attempts to create an invoice for the selected vendor in the selected invoice batch, there may already be an invoice for this vendor in the batch. If this is the case, the system will lean on the option selected here to determin whether to create a second invoice for the vendor, or to add a line item to the existing invoice.
This area is used to identify the Vendor to whom Employee contributions will be paid and to select an Invoice Batch in which the payments will be posted.
Vendor ID
Select the Vendor ID to whom deductions for this Standard Deduction should be paid. Press the lookup button to Select the Vendor ID from a list of Vendors.
Batch ID
Select the Batch ID where automatically created Invoices will be placed for transactions involving this Standard Deduction.
When the system attempts to create an invoice for the selected vendor in the selected invoice batch, there may already be an invoice for this vendor in the batch. If this is the case, the system will lean on the option selected here to determin whether to create a second invoice for the vendor, or to add a line item to the existing invoice.
For more information see Setup: Payroll: Miscellaneous: Create AP Invoices Automatically.