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W
worldwash
July 21, 2024
Question

Personal savings account set up Deductions and contributions

  • July 21, 2024
  • 5 replies
  • 49 views

I Have an employee that wants an amount back that we have been deducting for him! How do I do that so it'll deduct from his balance?

    5 replies

    A
    Archie_B
    Level 6
    July 21, 2024

    Hello there, worldwash. I can see how confusing this can be, especially if this situation is not the usual payroll process.

     

    I'll explain some insights to help you track this in QuickBooks and pay your employee back for the deduction.

     

    In QuickBooks Online Payroll, even though you can set up a deduction item for your employee's payroll savings, you can look for other ways to set it up since we also have to consider that payroll deductions typically reduce taxable income (pre-tax) like for taxes or health insurance. 

     

    Thus, If they want a refund for previous deductions, this would likely be considered as a reimbursement and needs separate accounting procedures. Since payroll deduction is not designed in a way to handle this type of transaction. Also, before you process a refund or a reimbursement to your employee, I recommend consulting a payroll expert or accountant to ensure proper handling while complying with tax regulations.

     

    On the other hand, you can also set up a different direct deposit split account for your employee's savings. See this article for more information: Set up direct deposit for employees.

     

    I'll keep an eye on this thread if you still have follow-up questions about payroll. Have a great day and enjoy your weekend.

    W
    worldwashAuthor
    July 21, 2024

    Ok, I have an idea now. My only question would be how do I deduct it from his balance on his check?  This was something he wanted to help him save a little bit on the side and its after taxes.   Its like a slush fund so he doesn't spend it.

     

    For example I set up this deduction for $100 a pay check after taxes. he has $2200 saved up.  He wants $2000 from that to take a vacation. How do I adjust that balance on his pay check?

    A
    Aldren18QuickBooks Team
    QuickBooks Team
    July 21, 2024

    Thank you for your continued engagement, @worldwash! It's great to see you supporting your employee’s savings goals. Let’s jump right into the steps to set this up in QuickBooks Online Payroll for a seamless process.

     

    To adjust the balance and provide your employee with the $2000 for their vacation, we’ll create a reimbursement item in QuickBooks Online (QBO) Payroll.

     

    This approach allows you to add the saved amount to their paycheck while keeping the regular $100 deduction intact. I’ll guide you through the process step-by-step so you can confidently manage this "slush fund" withdrawal.

     

    To create a reimbursement item, follow these steps:

     

    1. Go to Payroll and select Employees.
    2. Choose the employee.
    3. From Pay types, hit on Edit.
    4. Scroll to the Additional Pay Types section and click Reimbursement.
    5. Name something like "Personal Savings Reimbursement" by clicking the Edit icon.
    6. Once done, choose Save.

     

    Ensure this item is set up as non-taxable since it's a reimbursement after-tax deduction. After creating the reimbursement item, proceed to add it to the paycheck.

     

    Here's how:

     

    1. Go to the Payroll menu and select Run Payroll.
    2. When you are on the screen to enter the employee's pay details, add the Reimbursement item.
    3. Enter the amount of $2000.
    4. Review the Paycheck and ensure the regular $100 deduction is still present.
    5. The paycheck will now show the regular pay, the $2000 reimbursement, and the $100 deduction.

     

    Don't forget to manually update your internal records to reflect the new balance in the employee's savings account.

     

    While this approach can effectively handle reimbursement, it's best to seek advice from a payroll expert or accountant to ensure compliance with all tax regulations. 

     

    Furthermore, I've added the following links to assist you with future tasks in QBO Payroll: printing, setting up direct deposit, and adding pay history.

     

     

    Let us know if you have other questions or concerns about setting up a personal savings fund for your employee in QBO Payroll. Drop a reply to this post or create another one. The Community team is always here to lend you a hand.

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