Set Up a Payroll Deduction

Payroll deductions are set up to track and calculate your employee's deductions. In your company settings, set up your payroll deduction by making the following modifications to the default payroll deductions:

To change the way deductions are subtracted from an employee's income

1. In the Home window on the Setup menu, choose Settings.
2. Click on Payroll, and then Deductions.
3. Double-click in the Deduct By column, next to the deduction you want to modify.
4. Select the deduction method you want and click Select. You can select from Amount, Percent of Gross, Percent of Incomes (Sage 50 Premium Accounting), Rate x Hours Worked (Sage 50 Premium Accounting), and Percent of Hourly Rate (Sage 50 Premium Accounting).

   Tip: If using the Percent of Incomes, Rate x Hours Worked, or Percent of Hourly Rate, you can also select which incomes to include in the calculation in the Income Applied column. (Sage 50 Premium Accounting)

5. Click OK.

To deduct an employee's income before or after taxes, benefits, contributions, or vacation pay

1. In the Home window on the Setup menu, choose Settings.
2. Click on Payroll, and then Deductions.
3. In the Deduct After columns, place a check mark if you want to deduct the employee's income after taking out the selected tax, benefit, contribution, or vacation pay.
4. Click OK.

To rename a payroll deduction

1. In the Home window on the Setup menu, choose Settings.
2. Click on Payroll, and then Names, followed by Income and Deductions.
3. In the Name column of the deductions table, click the deduction you want to modify and type in the new name.
4. Click OK.

After you have set up the payroll deductions, you need to modify the employee's record to use these payroll deductions in the payroll calculations.