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This documentation is provided for users whose current AccuBuild software version is 7.1.0.0 or earlier. The set up of pre-tax deductions has been enhanced with version 7.1.0.1.
This scenario assumes that the 401K contribution is based on a percentage of the gross wages and is subject to all taxes, except federal withholding (FWH) and state withholding (SWH), and is subject to union and workers compensation insurance accruals.
| 1. | Set up in the Chart of Accounts a general ledger account number for the 401K payable. |
| 2. | On the Misc Pays / Deds Tab of the Payroll Properties Screen, assign two miscellaneous pay accumulators and one corresponding miscellaneous deduct accumulators. |
| The first miscellaneous pay will back off the amount to be contributed to the 401K from the gross wages. This amount will be calculated as a negative pay amount. Enter 401K (-) as the description for this miscellaneous pay. (In the employee file, this item will be set up as a '% of gross and NOT withheld' pay type). |
| The second miscellaneous pay will add back to the gross wages the amount to be contributed to the 401K but is set up to be exempt from FWH and SWH. (In the employee file, this item will be set up as a % of gross AND withheld pay type.) Because the 401K (+) amount is withheld, a corresponding miscellaneous deduct must be set up. For example, if Misc Pay 3 is set up as the 401K (+), then Misc Ded 3 must be reserved for the automatic 401K deduction. Enter 401K as the description for this miscellaneous deduct and enter the new account number for the 401K payable (Step 1). |
| 3. | On the Pay Rates Tab of the Employees screen, enter the percentage of contribution in the 401K fields. Remember, percentages are entered as whole numbers. For example, 4% would be entered as 4.000. |
| Enter the percentage of contribution as a negative amount in the 401K (-) pay field. Select % of Gross – Not W/H as the pay type. |
| Enter the percentage of contribution as a positive number in the 401K(+) pay field. Select % of Gross – W/H as the pay type. |
| 4. | On the Ded Rates Tab of the Employees screen, the miscellaneous deduct assigned as 401K will be displayed. No amount is entered for this deduct and a deduction type is not assigned. AccuBuild will automatically accrue the deduct amount in this accumulator when the employee's payroll check is generated. |
| 5. | Repeat steps 3 and 4 for each employee participating in the 401K program. Payroll checks generated from this point on will now include the 401K contributions automatically. |
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