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vantage111
Level 1

When setting up payroll deductions I don't get the option to setup a pre-tax deduction. Both available options "Advance Repayment" and "Loan Repayment" are post tax.

I am trying to setup salary sacrifice for a ride to work scheme.
Solved
Best answer July 09, 2020

Best Answers
Charies_M
Moderator

When setting up payroll deductions I don't get the option to setup a pre-tax deduction. Both available options "Advance Repayment" and "Loan Repayment" are post tax.

Thanks for the quick response, vantage111.

 

Before we start, may I know what type of payroll are you using? This way, I can provide the appropriate steps on how you can setup payroll deductions for pre-tax.

 

In QuickBooks Online Advance Payroll, here's h ow you set up deductions:

 

  1. Select Payroll Settings, then Deduction Categories.
  2. 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.
  3. Enter a name for the deduction category.
  4. Select whether it will be a pre tax deduction.
  5. Add an external ID and select the NMW/NLW Calculation Impact as required.
  6. Select Save.

Feel free to check this article for more information about setting up deductions in QuickBooks Online (QBO): Setting up deductions in QuickBooks Online Advanced Payroll.

 

In the future, you'll want to make sure you choose the correct country when posting questions by clicking the country logo beside your profile. I've attached a screenshot for a better view:

 

 

 

This will route you to the UK site where you can post your questions for QuickBooks UK version. Another way is to simply visit this link.

 

You're always welcome to visit s anytime you need help. Have a great rest of the day!

View solution in original post

6 Comments
MariaSoledadG
QuickBooks Team

When setting up payroll deductions I don't get the option to setup a pre-tax deduction. Both available options "Advance Repayment" and "Loan Repayment" are post tax.

There are certain deductions that you can only set up as pre-tax, vantage111.

 

Voluntary payroll deductions are amounts that your employees payout from their paycheck. When setting up HSA plans and Health insurance, you'll have the option to set it up as pre-tax. Choosing Other Earnings lets you set up an after-tax deduction. You'll want to set up this ride to work scheme as an after-tax deduction. You can go over to these articles to know the type of deductions that are supported by pre-tax.

However, I suggest reaching out to your accountant's advice for other ways on how to set this type of deduction. 

 

You can also run payroll reports if you want to see useful information about payroll: Run Payroll Reports

 

Don't hesitate to let me know if you have further questions. I'll be here to help.

vantage111
Level 1

When setting up payroll deductions I don't get the option to setup a pre-tax deduction. Both available options "Advance Repayment" and "Loan Repayment" are post tax.

The scheme we are using is Green Commute Initiative which is a salary sacrifice scheme.

My belief is it needs to be setup pre-tax to ensure the employees pays back the company the loan amount AND get the benefit of not paying tax/nic on this amount. For this scheme 32% saving for the employee.

Also, there should be a employer nic benefit of 13.5%.

 

vantage111
Level 1

When setting up payroll deductions I don't get the option to setup a pre-tax deduction. Both available options "Advance Repayment" and "Loan Repayment" are post tax.

Wait - this seems to be US site, I need UK support....

Charies_M
Moderator

When setting up payroll deductions I don't get the option to setup a pre-tax deduction. Both available options "Advance Repayment" and "Loan Repayment" are post tax.

Thanks for the quick response, vantage111.

 

Before we start, may I know what type of payroll are you using? This way, I can provide the appropriate steps on how you can setup payroll deductions for pre-tax.

 

In QuickBooks Online Advance Payroll, here's h ow you set up deductions:

 

  1. Select Payroll Settings, then Deduction Categories.
  2. 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.
  3. Enter a name for the deduction category.
  4. Select whether it will be a pre tax deduction.
  5. Add an external ID and select the NMW/NLW Calculation Impact as required.
  6. Select Save.

Feel free to check this article for more information about setting up deductions in QuickBooks Online (QBO): Setting up deductions in QuickBooks Online Advanced Payroll.

 

In the future, you'll want to make sure you choose the correct country when posting questions by clicking the country logo beside your profile. I've attached a screenshot for a better view:

 

 

 

This will route you to the UK site where you can post your questions for QuickBooks UK version. Another way is to simply visit this link.

 

You're always welcome to visit s anytime you need help. Have a great rest of the day!

View solution in original post

Graves12
Level 1

When setting up payroll deductions I don't get the option to setup a pre-tax deduction. Both available options "Advance Repayment" and "Loan Repayment" are post tax.

So HSA Health savings accounts can be pre-taxed?  Is it a certain cap that you can take out of each paycheck and Does it have to go directly into a HSA account in the bank from payroll?

Angelyn_T
QuickBooks Team

When setting up payroll deductions I don't get the option to setup a pre-tax deduction. Both available options "Advance Repayment" and "Loan Repayment" are post tax.

Thank you for joining the thread, @Graves12.

 

I can share with you some information about the HSA contributions. 

 

Yes, you can set a Pretax HSA plan and it goes directly to the HSA savings account. In the QuickBooks Online (QBO) Payroll US version, there's no specific cap you can take out of each paycheck. But, yes, you can set an amount per pay period for the contribution.

 

Here's how:

 

  1. Click on Employees from Workers or Payroll at the left pane.
  2. Select the employee's name.
  3. Tap on the Edit icon beside Pay.
  4. In section 4, select +Add deductions.
  5. Choose Deductions and Contributions, then New deductions/contribution, then HSA plans.
  6. Select either Pretax HSA or Taxable HSA.
  7. Add a Description and Amount per pay period.
  8. Hit OK.

If you're using QBO Advanced Payroll, you can check out the instructions provided by Charies_M above.

 

You can also check out these articles to learn more about setting up contributions to HSA plans for both US and UK:

 

Post again if you have any other questions. I'm always here to help. Have a good day!

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