The first thing you need to do to start using deductions in QuickBooks Advanced Payroll is to set up your deduction categories.
Set up a deduction category
- Select Payroll Settings, then Deduction Categories.
- To add a new deduction category, select Add. There will already be two deduction categories for you (Pre-Tax Deduction and Post-Tax Deduction). You can edit any of these by selecting the name of the deduction category.
- Enter a name for the deduction category.
- Select whether it will be a pre tax or post tax deduction.
- Add an external ID and select the NMW/NLW Calculation Impact as required.
- Select Save.
Once you have setup your deduction categories, they will now be available to be assigned to employees.
Setting up an indefinitely recurring deduction
To set up a deduction that recurs indefinitely:
- Go to the employee record for the employee that you want to create the recurring deduction for, and select Pay Run Inclusions.
- Select Add for the deductions you need for the employee, and complete the following details:
- Select the appropriate deduction category from the drop down list.
- Enter the deduction amount to be applied per pay run. It can be a Fixed amount or a Percentage of Gross earnings.
- Select whether the deduction should be paid manually, HMRC or a bank account.
- Select if the preserved earnings should be used from the drop down menu.
- Apply a note if you would like this deduction to have a note attached on the employee's payslip.
- Please state when you want this inclusion to start and when it should expire.
- Select Save.
The next time you process pay run that includes this employee, the deduction will automatically appear.
To check the status of a deduction
You can quickly see the status of expiring deductions by going to the employee Pay Run Inclusions screen.
Once you’ve setup your deductions, a summary of the deductions will be displayed which will include:
- The amount or date at which the deduction will expire.
- The start date of the deductions.
- Whether or not the deduction has actually expired.
- For amount based expiries, the current amount that has been paid.
- The payment type setup for this deduction.