Some employers may elect to contribute an amount to an employees 401(K) or Simple account based on the employee contribution. Some employers may just make a contribution. You can set up a payroll item in a live payroll file which will accrue the company contribution.
To set up a 401K or Simple Employer Contribution based on the employee deduction:
Select Setup>Payroll Items.
Select Employer Accrual in the Type field.
Enter the rate of the employer match in the Amount or % field because employee contribution will be multiplied by this amount. For example, if the company is matching the employee contribution dollar for dollar, enter 1.000. If the company is matching fifty cents on the dollar, enter 0.5000.
Select Item(s) Amount Limit On Gross in the Based On field.
Click on the Items button and select the 401K or Simple item(s) in the table.
Leave the Department field blank.
Click OK to save.
Enter the appropriate Limit. If the employer is matching up to 3% of the Gross, enter .0300.
Select Check in the Limit Type.
Do not enter or change anything in Limit 2 or Limit Type 2.
Select the desired Expense Account.
Select the desired Liability Account.
Select the desired Contact in the Payable To field is you will be generating a check or EFT for this liability.
W2 Tracking, W2 Code, Class, Sub, and Nature of Work do not apply to this type of accrual.
To set up a 401K or Simple Employer Contribution as a Percent of Gross Pay:
Select Setup>Payroll Items.
Select Employer Accrual in the Type field.
If ALL employees will receive this contribution, enter the rate of the employer match in the Amount or % field. If the employer is contributing 3% regardless of the employee participation, enter .0300. If there are some employees who will not be receiving this benefit, enter the item and rate on the Item(s)/Limits tab for the applicable employees.
Select Gross Pay in the Based On field.
Enter the appropriate Limit.
Select Annual Calendar Year in the Limit Type.
Do not enter or change anything in Limit 2 or Limit Type 2.
Select the desired Expense Account.
Select the desired Liability Account.
Select the desired Contact in the Payable To field is you will be generating a check or EFT for this liability.
W2 Tracking, W2 Code, Class, Sub, and Nature of Work do not apply to this type of accrual.
Note: The employer contribution can be based on Total Gross Pay, Medicare Wages, or specific pay items.
To set up a Safe Harbor or tiered Employer Contribution:
For a Retirement Plan with a company match that is 100% of the 1st 3% of Gross and 50% of the next 2% of Gross:
Set up 2 separate Employer Accrual items as shown below.
Comments
0 comments
Article is closed for comments.