To add a payroll deduction, start by selecting "Employee Payroll Setup" under the Payroll section in the Main Menu. Select an employee that needs the deduction or click on "Add New Employee".  For a new employee, enter the personal information and click on "Next".  For an existing employee, just click on the "Next" button.  Once on the additions page, click on the "Next" button.  There is a list of default withholdings pre-set with default information for your convenience.  Under that list you can create a new withholding or deduction by selecting "Add New Withholding or Deduction". Select a type from the drop down list.  You may edit the Description, assigned GL account, Type, and W2 box to meet your individual needs.

If  you create an "Other" withholding that is not part of these withholding defaults, then you will be required to complete these fields. The Description field should identify the withholding type for the employee as this will be reflected on the paycheck stub. The Default GL Account field is where you will assign the account which the withholding amount will be posted to the GL. And in turn, where the withholding appears on the financial statements - typically as a liability on the Balance Sheet. The Type refers to whether the pay withholding relates to Federal and FICA taxes, state taxes, other withholdings such as employee health insurance premiums, etc. And the W2 box allows you to assign the withholding to any applicable box for proper coding on the employees' Form W2 - Wage and Tax Statement.

The Pre-Tax Indicators allow you to check any of these taxes as applicable only to wages remaining after the withholding. If the payroll withholding should only be deducted after these taxes have been withheld from wages, then leave the Pre-Tax Indicator box unchecked for that tax type.

The Default Withholdings box is provided for you to enter either a percentage of wages or a set dollar figure for a withholding that is recurring in the same amount for every employee on every paycheck, if applicable. Finally, if the new withholding applies to all employees in the company, place a check in the box to update each currently entered employee record so that the withholding is set up for all future paychecks.

Click "Finished" to complete the setup of the new deduction.