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Set up, change, or delete employee-paid payroll deductions

by Intuit•64• Updated 3 weeks ago

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.

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.

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.

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.