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Set up or change a retirement plan

by Intuit•181• Updated 5 days ago

You can set up, track, and report various retirement plan deductions and company contributions for your employees in QuickBooks Online Payroll or QuickBooks Desktop Payroll.

Step 1: Determine which retirement plan to set up

There are different types of retirement plans supported in QuickBooks. Determine which plan you want to set up for your employees and review its contribution limits.

To learn more about retirement plans, visit the IRS website.

For choosing a retirement plan, you can check with your plan provider for details. You can also visit the IRS website to learn more

Here are the supported retirement plans in QuickBooks:

  • 401(k) / 401(k) catch-up / 401(k) catch-up (60-63)
  • SIMPLE 401(k) / SIMPLE 401(k) catch-up / SIMPLE 401(k) catch-up (60-63) / SIMPLE 401(k) catch-up higher limit / SIMPLE 401(k) catch-up (60-63) higher limit
  • 403(b) / 403(b) catch-up / 403(b) catch-up (60-63)
  • SARSEP / SARSEP catch-up / SARSEP catch-up (60-63)
  • SIMPLE IRA / SIMPLE IRA catch-up / SIMPLE IRA catch-up (60-63) /SIMPLE IRA catch-up higher limit / SIMPLE 401(k) catch-up (60-63) higher limit
  • After-tax Roth 401(k) / After-tax Roth 401(k) catch-up / After-tax Roth 401(k) catch-up (60-63)
  • After-tax Roth 403(b)
  • Company-only plan
  • 457(b) - QuickBooks Desktop Only
  • Roth SIMPLE IRA - QuickBooks Desktop Only (must use the SIMPLE IRA tax tracking type, and then remove all check marks from the Taxes screen when creating the payroll item)

Note: After-tax Roth plans calculate on your employees' gross wages and are subject to all taxes at the time of contribution per IRS regulations.

Deferred - Taxes aren't deducted at the time the amount is withheld from an employee's paycheck. Taxes are withheld at the time the employee withdraws funds from their retirement plan.

Taxable or after-tax - These contributions are deducted from the employees payroll after the taxes have been calculated.

Step 2: Set up a retirement plan deduction or a company-match contribution item

Note: Not sure which payroll service you have? Here's how to find your payroll service.
  1. Go to All apps A bunch of numbers and letters on a tile wall., then Payroll, then Employees (Take me there).
  2. Select your employee.
  3. From Deductions & contributions, select Start or Edit.
  4. Select + Add deduction/contribution.
  5. Select Retirement Plans in the Deduction/contribution type â–Ľdropdown.
  6. For Type, select the applicable retirement plan.
    • If you need to track a company-only contribution with no employee match, choose Company-only plan.
    • If you need to set up a catch-up plan for employees aged 50 or older, select the appropriate retirement catch-up plan from the dropdown.
  7. Enter the name of the provider or plan in Description (appears on paycheck).
  8. Complete the remaining fields.
  9. If you have a company match, under Company contribution, select the dropdown menu to choose how you want to calculate the amount.  Complete the new fields to enter the amount or percent per paycheck and annual maximum.
  10. Select Save then Done.

Step 1: Set up a retirement plan deduction or company match item

  1. Go to Lists, then Payroll Item List.
  2. Select Payroll Item â–Ľ dropdown, then New.
  3. Select Custom Setup, then Next.
  4. Select Deduction or Company Contribution, then Next.
  5. Enter the name of the deduction or company matching item, then select Next.
  6. Select the name of your retirement plan provider, or add it, and enter the account number. In the Liability account field, select the account that tracks the deduction or contribution to be paid. Select Next.
    • For company match items, in the Expense account field, select the account that you want to track the item. Select Next.
  7. In the Tax Tracking Type window, select the applicable retirement plan. Select Next twice.
  8. Under Calculate based on quantity, select Neither and select Next.
  9. Leave Default Rate and Limit fields blank. You can add the rate and limit when you add the item to the employee profile
  10. Select Finish.

If you need to set up a catch-up plan for employees aged 50 or older, repeat Steps 1-10 to create the catch-up payroll item. Make sure to include the word "catch-up" in the payroll item name to clearly differentiate it from the original retirement plan.

Step 2: Add the items to the employee profile

  1. Go to Employees, and then select Employee Center.
  2. Select your employee.
  3. Select Payroll Info, then add the retirement plan items in the Additions, Deductions, and Company Contributions section.
  4. Enter the amount per period and the limits.
  5. Select OK, when you're done.

Step 3: Track the retirement contributions on your employees' paychecks

The amounts you or your employees contribute to a retirement plan must be reported on Form W-2. So the next time you pay your employees, make sure the retirement amounts are showing in their paychecks. Note: retirement plan items don't deduct on tip wages.

Edit or remove a retirement plan item

If you need to modify the deduction or contribution item, here’s how:

  1. Go to All apps A bunch of numbers and letters on a tile wall., then Payroll, then Employees (Take me there).
  2. Select your employee.
  3. From Deductions & contributions, select Edit.
  4. Select Edit ✎ next to the deduction/contribution you want to modify, then make your updates. Or select the Trash bin icon if you want to remove it.
  5. When finished, select Save, then Done.

 Modify the payroll item

  1. Go to Lists, then select Payroll Item List.
  2. Right-click the item and select Edit Payroll Item.
  3. Change the info as needed on each window.
  4. Select Finish.

Remove the QuickBooks Payrollitem

  1. Select Employees menu,  then Employee Center.
  2. Select your employee. 
  3. Select Payroll Info.
  4. In the Additions, Deductions and Company Contributions section, select the amount (if there's any), and the item name, then press Delete on your keyboard.
  5. Select OK when done.

Learn about employee contribution limits

QuickBooks Online Payroll automatically tracks these limits based upon the deduction item used.QuickBooks Desktop limits must be manually entered on the payroll item or the employee each year.

Starting in 2026, Secure Act 2.0 changed catch up contributions for employees over 50 years old who earned over $145,000 in Social Security Wages in the prior year:

  • The initial contributions up to the limit for employees under 50 may be made either before or after tax, based upon the employee's preference.
  • Any "catch up" amount deducted, including the over 50 catch up contribution and the 60-63 extra catch up contribution must be after-tax.
  • QuickBooks Payroll won't automatically switch an employee from pre-tax to catch up after-tax deductions. To do this:
    • Review employee prior year wages seen in Box 3 of their prior year W-2
    • Track the contributions and year-to-date retirement plan deductions for any employee who received $145,000 or more in Box 3 in the prior year.
    • Once the employee reaches the maximum for employees under 40, add a "Roth"/after-tax retirement plan catch-up deduction
    • Use the after-tax deduction for the rest of the year, up to annual catch-up maximum
  • Note: These changes don't apply to SEP or SIMPLE IRA.
Plan TypeExempt FromLimit less than 50 YearsLimit for 50-59 and 64+Limit for 60-63 YearsW-2 Box Code
401(k)FIT & SIT$24,500$32,500$35,750Box 12-D
SIMPLE 401(k)FIT & SIT$17,000
$18,100*		$21,000
$21,950*		$22,250
$23,350*		Box 12-D
After-tax Roth 401(k)Nothing - Fully Taxable$24,500$32,500$35,750Box 12-AA
Simple IRAFIT & SIT$17,500$21,500$22,750Box 12-S
403(b)/TSAFIT & SIT$24,500$32,500$35,750Box 12-E
After-tax Roth 403(b)Nothing - Fully Taxable$24,500$32,500$35,750Box 12-BB
408(k)(6)/SEP IRAFIT & SIT$24,500$32,500$35,750Box 12-F
457(b)FIT & SIT$24,500$32,500$35,750Box 12-G
Roth 457(b)Nothing - Fully Taxable$24,500$32,500$35,750Box 12-EE

*Section 117 of Secure Act 2.0 allows for higher limits for SIMPLE retirement plans.

If you use QuickBooks Online Payroll, use the deduction item Higher Limit for your employee.

If you use QuickBooks Desktop Payroll, enter the limit on the retirement payroll item.

For additional info, see IRS contribution limits.

Plan TypeExempt FromLimit less than 50 YearsLimit for 50-59 and 64+Limit for 60-63 YearsW-2 Box Code
401(k)FIT & SIT$23,500$31,000$34,750Box 12-D
SIMPLE 401(k)FIT & SIT$16,500
$17,600*		$20,000
$21,450*		$21,750
$22,850*		Box 12-D
After-tax Roth 401(k)Nothing - Fully Taxable$23,500$31,000$34,750Box 12-AA
Simple IRAFIT & SIT$16,500$20,000$21,750Box 12-S
403(b)/TSAFIT & SIT$23,500$31,000$34,750Box 12-E
After-tax Roth 403(b)Nothing - Fully Taxable$23,500$31,000$34,750Box 12-BB
408(k)(6)/SEP IRAFIT & SIT$23,500$31,000$34,750Box 12-F
457(b)FIT & SIT$23,500$31,000$34,750Box 12-G
Roth 457(b)Nothing - Fully Taxable$23,500$31,000$34,750Box 12-EE

*Section 117 of Secure Act 2.0 allows for higher limits for SIMPLE retirement plans.

If you use QuickBooks Online Payroll, use the deduction item Higher Limit for your employee.

If you use QuickBooks Desktop Payroll, enter the limit on the retirement payroll item.

For additional info, see IRS contribution limits.

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