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Set up and add deductions and contributions to an employee's payroll

Note: There is a change to your QuickBooks Payroll experience. Click here to learn about the change and it's timing.

Learn how to set up and add deductions and contributions to an employee’s payroll.

With QuickBooks Payroll, you can set up and add deductions to your employees' payroll. In order to add deductions and contribution to the paycheques you send, you first need to set them up on your payroll and then add each deduction and contribution to your employee’s paycheque.

Step 1: Set up deductions and contributions on your payroll

Before you can add deductions and contributions to your payroll, you first need to set them up.

  1. Select the Gear icon, then Payroll Settings.
  2. Select Pay Schedules.
  3. Depending on what you need to set up, select Deductions or Contributions.
  4. Select Add a New Deduction or Add a New Contribution.
  5. From the dropdown menu, select Health Insurance, Retirement Plans, Non-cash taxable benefits or Other Deductions.
  6. Based on the deduction or contribution, enter the proper information:
    • If you select Other Deductions, enter a description for the deduction for the contribution.
    • If you select Health Insurance or Retirement Plans, enter the provider information.
    • If you select Non cash taxable benefits, choose the benefit type from the sub-menu.
  7. Once everything is filled out, select OK.

Step 2: Add deductions and contributions

Once you have set up your payroll to include deductions and contributions, you can then add them to your employees' payroll. You have to do this for each employee.

New employee

  1. Go to Employees and then Add an employee.
  2. Fill in sections 1- 4, select Edit ✎ next to section #5 Pay.
  3. Select the Edit pencil next to Does this employee have any deductions, choose a Deduction or contribution type from the dropdown list, or to create a new one, choose New deduction/contribution.
  4. Select which Type or sub-category of the deduction or contribution. You can learn more about each type’s tax implication by selecting the triangle.
  5. Enter the Provider name in the box provided. This is how the deduction/contribution will show up on the employee’s paycheque or pay stub.
  6. You can now enter the Employee deduction & Company-paid contribution amount per pay period. You can choose $, % or None, as well add an annual maximum to avoid over deducting. If the item is a contribution only, you can choose None for Amount per pay period.
  7. Select Ok.

Existing employee

  1. Go to the Employees, and then select the employee you want to edit.
  2. Select Edit ✎ next to Pay.
  3. Select Edit ✎ next to Does this employee have any deductions?.
  4. Choose a Deduction/contribution type from the dropdown list, or to create a new one, choose New deduction/contribution.
  5. Select which Type or sub-category of the deduction/contribution. Select which Type or sub-category of the deduction or contribution. You can learn more about each type’s tax implication by selecting the triangle (^).
  6. Enter the Provider name in the box provided. This is how the deduction/contribution will show up on the employee’s paycheque or pay stub.
  7. You can now enter the Employee deduction & Company-paid contribution amount per pay period. You can choose $, % or None, as well add an annual maximum to avoid over deducting. If the item is a contribution only, you can choose None for Amount per pay period.
  8. Select Ok.

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