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tbassingdavis
Level 1

Employee elective salary deferral - pre tax deduction

We are offering to deduct a pre tax salary deferral to employee's personal IRAs.  How do you set that up in Quickbooks so that it is pre tax?

1 Comment 1
LauraAB
QuickBooks Team

Employee elective salary deferral - pre tax deduction

Hello tbassingdavis,

 

I'm happy to go over the payroll item set up process so you can get started with tracking this for your employee. I recommend speaking with an accountant to ensure you're choosing the correct payroll item type and mapping.

 

When you set up a payroll item, such as a deduction, QuickBooks Desktop takes you through a number of steps to map the item to the correct accounts and entities while also allowing you to enter how the amount will be calculated. As a part of the process, you can choose whether it's calculated on gross or net pay, which is where your before or after tax comes in. For pre-tax, choose gross pay. Here's a screenshot from my test set up of a deduction item called salary deferral.

 

 

QuickBooks has a great tool to help you find an accountant that's familiar with the program called the Find a ProAdvisor tool. ProAdvisors are accountant users who've gone through QuickBooks training, which makes them a double threat with accounting and program knowledge. Click the link and enter your postal code to find an accountant near you. The results page allows for more in-depth filtering.

 

We have ProAdvisors here in the community as well that may chime in on this matter. Keep an eye out for their responses.

 

To learn more about payroll and payroll item set up, follow these steps in QuickBooks Desktop.

  1. Click Help in the top menu bar.
  2. Choose QuickBooks Desktop Help (Note: You can skip step 1 and 2 by pressing F1 on your keyboard as a shortcut).
  3. Choose the Help tab.
  4. Click the Search button to bring up the search bar.
  5. Use keywords to find relevant articles.

I hope that helps. Enjoy the rest of your day!

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