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Set up, change, or delete employee-paid payroll deductions
Employers use payroll deductions to manage employee payments for benefits like health insurance, retirement plans, or paycheck advances. Set up, edit or remove these items in your payroll service to ensure they are automatically deducted every payday.
To set up specific deduction items like insurance, HSA, FSA, retirement, garnishments, or advances, see the Related links section.
What you’ll need
An active Intuit QuickBooks Workforce or QuickBooks Desktop Payroll subscription.
Specific deduction details, including the plan name, account numbers, and calculation methods (amount or percentage).
Confirmation from a plan administrator or accountant regarding whether the item is pre-tax or after-tax.
If you use Intuit Enterprise Suite and have multiple companies, you can see all employees for all of your companies in the consolidated employee dashboard. From any of your companies:
From the Company Switcher dropdown, select Consolidated view.
Go to All Apps
, select Payroll, then select Employees.
From the employee dashboard, you can:
Search for a specific employee
Filter the view to see all employees for a specific company
Customize the info that shows on the dashboard
Make changes to employee info
Set up a new general deduction item
In Intuit QuickBooks Workforce or QuickBooks Desktop Payroll, you can set up pre-tax or after-tax deduction items. If you aren’t sure how the deduction is taxed, talk to your plan administrator or an accountant. You can use the steps below to set up general deductions like uniforms, tools, commuter benefits, or miscellaneous.
To set up other general deduction items, select your product below.
| Note: Not sure which payroll service you have? Here's how to find your payroll service. |
Intuit QuickBooks Workforce
Go to All apps
, then Payroll, then Employees (Take me there).Choose your employee and select Job & pay.
From Deductions & contributions, select Start or Edit.
Select + Add deduction/contribution from the Deduction/contribution ▼ dropdown.
Select Other Deduction from the Deduction/contribution type menu.
Note: If setting up an unlisted pre-tax item like commuter benefits, choose Health Insurance or Vision Insurance and select Pre-tax insurance premium after Step 7.
For the Type, choose Other after tax deductions.
Enter a Description for the plan name that will appear on paychecks.
Select the calculation method and enter the specific amount or percentage.
Select Save, then Done.
Check out this video starting at 3:42 to see how to set up employee deductions.
Quickly add employees to your payroll and make managing your team easier with QuickBooks Payroll.
Video transcript
[0:00] Before you can run payroll in QuickBooks Online Payroll, you need to add your employees. Let's go over how to add your employees, including their personal info, pay rates, pay schedules, work location, and deductions. We'll also show you how to make this easier by inviting your employees to add some of this info themselves. To start, go to Payroll.
[0:22] If you are setting up, select Start next to Tell us about your team. If you're setting up payroll for the first time, you'll be asked how you would like to set up payroll. You may be able to upload employee reports from your prior payroll service and then have QuickBooks import. Select Add employee. Add your employee's name, email address, and hire date.
[0:46] QuickBooks will automatically email them an invite to QuickBooks Workforce, where they can view pay info and documents. To save you some data entry, you can have your employees enter their personal, tax withholding, and bank account info themselves. Select Quick add. Congratulations, you've added your first employee! You can continue adding employees or finish adding details.
[1:09] When employee self-setup is on, you won't be able to edit some fields in the Personal info, Tax withholding, or Payment method sections. If you need to pay your employees right away or want to add the info yourself, turn off Employee self-setup. You can turn it on or off at any time. Once your employee adds their info through QuickBooks Workforce, you'll be able to see it and make changes.
[1:33] Let's start with the Personal section. Add your employee's personal details and contact information. Anything with an asterisk is required. All of the other fields are optional. When you're finished, select Save. Next, you'll move to the Job & pay section. Select the Employment details section to add a pay schedule and set the work location.
[1:55] For a pay schedule, tell us how often you pay this employee, when their next payday will be, and when the last day of that pay period will be. The payday is the day your employees get their checks or direct deposits. But the pay period is the days you're paying your employee for.
[2:13] QuickBooks Payroll shows you the next 4 paydays and pay periods based on the info you entered, so you can check that everything is correct. You can name this schedule, and if you want to use it for other employees, just check this box. If everything looks good, select Save. The work location is the physical address where your employee works.
[2:33] You'll see the address you gave us when you added your business details. If your employee is based out of a different location, add a new location. For Base pay, tell us how much you pay your employee. You can choose from hourly, salary, or commission only. For this example, we'll set up an hourly rate and save it. You can set default working hours to prefill timesheets.
[2:55] You can edit these hours when you run payroll. Now you'll see Additional pay types. Overtime pay and Qualified OT Tracking are already set up for you. Select Add for other items like holiday pay, bonus, or tips.
[3:09] If your employee has deductions like 401(k), health insurance, or garnishments like child support, or if your business contributes to your employee's retirement or health insurance, add them by selecting Add on Deductions & contributions. Then fill out the details and select Save. When finished adding all the deductions, select Done. You can also set up time off policies.
[3:33] If you want more details on adding a PTO policy, check out this other video. Now you know how to add your employees in QuickBooks Payroll.
QuickBooks Desktop Payroll
Step 1: Set up the deduction item
Go to Lists, then Payroll Item List.
Select Payroll Item ▼ dropdown, then New.
Select Custom Setup, then Next.
Select Deduction, then Next.
Enter the name of the deduction, and select Next.
If applicable, select the name of the plan administrator (or add it), and the account number. Then select Next.
Select the applicable Tax tracking type. Select None if the deduction is after-tax.
Select Next three times.
For None tax tracking type, select net pay in the Gross vs. net window, then Next.
Leave Default rate and limit fields blank unless these apply to all of your employees. You’ll add the rate and limit when the item is added to the employee profile.
Select Finish.
Step 2: Add the item to the employee profile
Select Employees, then Employee Center.
Select your employee.
Select ✎, then select Payroll Info.
From Additions, Deductions, and Company Contributions, add the deduction item.
Enter the amount per period and a limit if applicable.
Select OK.
Edit a payroll deduction item
If you want to change the employee’s deduction info such as amount, percentage, or its description, follow the steps for your product.
Intuit QuickBooks Workforce
Go to All apps
, then Payroll, then Employees (Take me there).Select your employee and choose Job & pay.
In Deductions and contributions, select Edit ✎.
Select Edit ✎ next to the specific deduction.
Update the information and select Save, then Done.
QuickBooks Desktop Payroll
If you need to change the payroll item itself:
Go to Lists, then select Payroll Item List.
Right-click the item and select Edit Payroll Item.
Change the info as needed on each window.
Select Finish.
If you need to change the deduction amount for your employee:
Go to Employees, then select Employee Center.
Select your employee.
Select Payroll Info.
Change the amount or limit.
Select OK.
Delete or deactivate a payroll deduction item
Intuit QuickBooks Workforce
You can delete a deduction from your employee. There isn't a "list" to remove deduction items from payroll completely.
Go to All apps
, then Payroll, then Employees (Take me there).Select your employee, then Job & pay.
From Deductions and contributions, select Add or Edit.
Select the trash bin icon next to the deduction you want to remove.
Select Delete, then Done.
You can make a payroll deduction item inactive if no employees are assigned to it.
Go to All apps, then Payroll, then Employees (Take me there).
Select Edit payroll items
Select the item you want to change.
Select Make inactive or Make active
QuickBooks Desktop Payroll
If the deduction wasn't used on paychecks, you can delete it from the payroll item list. If it was used, you can edit the item and rename it Do Not Use.
Go to Lists.
Select Payroll Item List.
Right-click the item and select Delete Payroll Item.
Select OK on a message, Are you sure you want to delete this payroll item?
You can make a payroll deduction item inactive if no employees are assigned to it.
Go to Lists, then select Payroll Item List.
Right-click the item and select Make Payroll Item Inactive or Make Payroll Item Active.
Note: If you don’t see the option to Make Payroll Item Active, make sure Include inactive is checked at the bottom of the list.
Results
After completing these steps, the deduction items will automatically appear on the employee's next paycheck. The system will calculate the specified amounts or percentages and subtract them from the gross or net pay based on your configuration.
Next steps
Review your next payroll run to verify that the deductions are processing correctly. If you manage multiple employees, you may want to Manage your payroll items in QuickBooks Online Payroll to update items in bulk.
Related links
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