Setting up deductions in QuickBooks Online Advanced Payroll

Getting started with deductions

The first thing you need to do to start using deductions is to set up your deduction categories.


To setup a deduction category:


  1. Go to Payroll Settings, then Deduction Categories.
  2. To add a new deduction category, click Add. There will already be 2 deduction categories for you (Pre-Tax Deduction and Post-Tax Deduction). You can edit any of these by clicking on the name of the deduction category.
  3. Enter a name for the deduction category.
  4. Select whether it will be a pre or post tax deduction.
  5. Add an external ID and select the NMW/NLW Calculation Impact as required.
  6. Click Save.


Once you have setup your deduction categories, they will now be available to be assigned to employees.