| 1. | Set up a general ledger account number for the deduction (ie. '401K Payable') |
| 2. | Set up the deduction accumulator on the Misc Pays / Deds Tab of the Payroll Properties Screen. For W-2 purposes, each pre-tax deduction must be set up with their own deduction accumulator. |
| 3. | Define the tax exemption status for the pre-tax deduction on the State Payroll Tax Info Screen which is located through the globe icon on the Tax Rates Tab of the Payroll Properties Screen. Click on each tax option under the appropriate deduction accumulator; a check mark will indicate which taxes are exempt. Only one exemption definition may be set up for each deduction accumulator for each state. (Note: By default, AccuBuild will display a check mark in all of the tax boxes, however, the system ignores these settings unless the deduction type (see Step 5 below) has been set up as pre-tax. To avoid confusion, please un-check all boxes in all columns except those that are applicable.) |
| 4. | Set up the fund name or the party that will be receiving the contributions as a vendor in the clients list. |
| 5. | Set up the deduction as a Local Deduction Code through the Payroll > Controls menu option. Follow the instructions on the local deduction Help screen to enter the information. Separate local deduction codes may be established for each employee or a few codes may be set up that can be shared by multiple employees provided that the deduction type and collection agency are the same for the group of employees. Enter the fund name or the receiving party (as set up in Step 4) in the Collection Agency field. |
| If the local deduction code is specific to a single employee, then be sure to reference the employee in the deduction code description. Enter the specific deduction amount or rate in the Deduct Rate field. Remember, percentages are entered as whole numbers. (ie. 4% is entered as 4.000). |
| The local deduction code can be set up to be used by multiple employees by entering in the deduction rate as $1 or 1% depending on the deduction type (see below). The code can then be linked to each employee with the specific rate entered on the employee screen. |
| Choose either 'Pre-tax - Flat Amount', 'Pre-tax - % of Gross' or 'Pre-tax - Hourly' in the Deduction Type field. Note: Percentage-of-gross wage and hourly pre-tax deductions can only be set up as a local deduction. |
| 6. | Link the local deduction code to the employee(s). |
| On the Ded Rates Tab of the Employee List Screen, the miscellaneous deduct accumulator assigned with the description of the pre-tax deduction will be displayed in the top half of the screen. No amount is entered and a deduction type is not assigned in this portion of the screen. AccuBuild will automatically accrue the deduction in this accumulator when the employee's payroll check is generated. |
| Local deduction codes are linked to the employee on the bottom half of the Ded Rates Tab of the Employee List Screen. AccuBuild will use the rate associated with the Local Deduction Code unless a new rate is entered on this screen. An annual (current calendar year) cutoff may be entered with each local deduction code. This cutoff limit represents the maximum accumulated deduction amount for the year not the maximum salary. |
| 7. | Set up the W2 information as applicable. |
| The pre-tax deduction may need to be listed separately on the employee's W2. Be sure to check with your CPA or the IRS for more information. To list the deduction on the W2, go to the Employees > Fed Tab and W2 Box 12 Info section of the screen. To print the deduction amount on the W2, enter the deduction code letter (check with the IRS guidelines or your CPA for more information) and check mark the Ded Accum box. If the accumulator box is checked, then the Amount field will change to show you a list of check stub deduction descriptions (Step 2 above). Select the proper deduction accumulator and the system will automatically calculate the total amount that will appear on the employee's W2. |
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