Roth 401k Payable To

greenpointlm · ‎February 21, 2019

I have gone through the steps on how to create a payroll item for a Roth 401k, what do I set the "Payable To" to? We have the traditional 401k referring to PX401EEPRE, is there a preset for a Roth account? When running payroll it will take it out of the post tax amount, if set up correctly, is this correct?

qbteachmt · ‎February 22, 2019

For Paychex, if you need to send the payment, then it is the same as Child Support or any other Wage Garnishment. They tell you how much it is, which they did Not take from your bank and they did not include in takehome. That is your Liability to pay later. Example:

Gross Wages + Employer taxes = total Paydate expense

Amounts Deducted that you need to pay are in lieu of banking details.

Gross pay is broken out into Employee Takehome, Employee share of taxes, and Employee Deductions to repay employer loans or to have the Employer pay out as Child Support, Health Insurance and Retirement Contributions. That makes them Liabilities.

Debit Gross Wage expense

Debit Employer Tax expense

Credit Banking for Direct Deposit total

Credit Banking for Paper Checks issued by Paychex

Credit Liability for amounts not yet paid from Paychex, because the Employer will be making these payments

= everything is in balance, if you did that correctly.

View solution in original post

Kristine Mae · ‎February 21, 2019

Hey there, Greenpointlm.

I'd like to provide you what I know about Roth plans.

The Payable To is set to the retirement agency where you will pay the plan. There isn't a preset for a Roth account. And yes, Roth plans are deducted after tax. If it's set up correctly, our software will take out the amount.

I've got you an article for more more information about Roth plans: Set up Roth 401(k) and Roth 403(b), and Roth 457(b) plans.

If you need something else, you can always post anytime. Have a good one!

greenpointlm · ‎February 21, 2019

It'll be done through Paychex; however, they do not take care of our payroll. Do I need to contact them to get the Payable To info for the Roth 401k?

I've looked at the mentioned article previously and didn't get the answer I was looking for.

Kristine Mae · ‎February 21, 2019

Hello again, Greenpointlm.

If it's done through Paychex, you'll want to contact their support. They will help you get the Payable To information.

Don't hesitate to get back to us if you have other payroll concerns.

qbteachmt · ‎February 22, 2019

For Paychex, if you need to send the payment, then it is the same as Child Support or any other Wage Garnishment. They tell you how much it is, which they did Not take from your bank and they did not include in takehome. That is your Liability to pay later. Example:

Gross Wages + Employer taxes = total Paydate expense

Amounts Deducted that you need to pay are in lieu of banking details.

Gross pay is broken out into Employee Takehome, Employee share of taxes, and Employee Deductions to repay employer loans or to have the Employer pay out as Child Support, Health Insurance and Retirement Contributions. That makes them Liabilities.

Debit Gross Wage expense

Debit Employer Tax expense

Credit Banking for Direct Deposit total

Credit Banking for Paper Checks issued by Paychex

Credit Liability for amounts not yet paid from Paychex, because the Employer will be making these payments

= everything is in balance, if you did that correctly.

kimbercooley · ‎May 07, 2019

My pastor is tax exempt but has chosen to put his 3% raise in a Roth. I set up the Roth in QB as the article explained. Once it is set up, what is the amount I put in the payroll information page? Example, he allocates $2,074.50 per year to a Roth which is a $79.79 per paycheck since he is paid 26 times a year. Will I put the 79.79 in the payroll information section under Additions, Deductions and Company Contributions?

I'm just a little confused.

Mark_R · ‎May 07, 2019

Hello there, @kimbercooley.

You can consider putting the $79.79 in the payroll information. However, I suggest seeking help with your accountant regarding this matter.

If this 3% raise is implemented by the IRS, you'll need to set up the deduction into percentage rate and put the limit per year which is $2,074.50. This way, the system will record your payroll transaction accurately.

Here's how to set up deduction:

In the Employee Center, double click your pastor's name.
Go to Payroll Info.
In the Additions, Deductions and Company Contributions section, select the Item Name from the drop-down.
In the Amount column, enter 3.0% and 2,074.50 under Limit column.
Hit OK to save.

Once done, it'll automatically deduct 3% of the gross pay every time you'll create a paycheck to your pastor.

In case you need tips and related articles in the future, visit our QuickBooks Community help website for reference: QBDT Self-help.

That's it! Please let us know if you have any other questions managing your payroll. We're always here to help.

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