How to Set Up Voluntary Deductions in QuickBooks Online Payroll

Last Updated on October 11, 2021 by Editorial Team

Today, Accountwizy with a new topic to set up voluntary deductions in QuickBooks Online payroll. We have already discussed many topics regarding the payroll like errors, set up procedure, etc, but this topic is totally different from others. This topic is about the deductions in payroll.

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Actually, voluntary deductions are the subtracted amounts from an employee’s net pay to cover the cost of things. It includes HSA plans, FSA plans, and etc. Let’s go to the deep to collect more information, and get the knowledge about voluntary deductions in QuickBooks Online Payroll:    

QuickBooks Voluntary Deduction Types

QuickBooks Online payroll or the Intuit Online Payroll has different types of deductions which are includes in different categories. We have clearly clarified all the details in the below table 

Voluntary CategoryDeduction Types
HSA (Health Savings Account) PlansTaxable HSA and Pretax HSA
FSA (Flexible Spending Account)PlansMedical Expense FSA
Health InsuranceDental, Medical, or Vision Insurance
Retirement PlansSIMPLE IRA, SARSEP, 401(k), 403(b), Roth 401(k), and catch-ups
Other DeductionsCash Advanced Prepayment, Loan Repayment, other after-tax deduction

All of the types and categories are included in the voluntary payroll deduction, but the garnishments are not included involuntary deductions. 

Procedure to Set Up Voluntary Deductions in QuickBooks Online Payroll

Set up the voluntary deductions in QuickBooks Online by adding new deductions, and by assigning a deduction item to employees, with the below procedures: 

How to Set Up New Deduction Item to Employees

The first, and manual step is to set up a new deduction item for employees. Once the employee deduction is set up, this will appears as an option to choose when adding a deduction to the rest of the employees. 

Steps to Set Up New Deduction Item to Employees in QuickBooks Online Payroll

If you are a QuickBooks Online payroll user, you can follow the below steps to set up a new deduction item for employees:

  • Go to the ‘Workers’ section, and select the ‘Employees’ option.
  • After that, choose the Employee’s name, click on the ‘Edit’ option, and then on the ‘Pay’ option.
  • Go to section 5, and select the ‘+Add a new deduction’ option or on the ‘+Add Deductions’. 
  • Now from the ‘Deductions/Contributions’ dropdown, select the ‘New Deduction/Contribution option.
  • Select a ‘Deduction Type’, and from the small arrow, choose the ‘Type’ option.
  • Enter the provider name (which displays on your paycheck).
  • Select the ‘$ amount’ or ‘% of gross pay’ from the ‘Amount per pay period’ section.
  • Enter the $ amount or the percentage in the ‘$ amount’, or ‘% of gross pay’. 
  • Repeat the same process for the Company paid contribution as applicable. 
  • Lastly, click the ‘Ok’ option, and then on the ‘Done’ option.    

Steps to Set Up New Deduction Item to Employees in Intuit Online Payroll Full Service

Connect with our Accountwizy experts to set up new deduction items for employees in Intuit Full Service. 

Steps to Set Up New Deduction Item to Employees in Intuit Online Payroll Enhanced

Follow the procedure to set up new deduction items for employees in Intuit Online Payroll Enhanced: 

  • At first, select the ‘Employee’s Name’ from the ‘Employees’ section, and go to the ‘Deductions & Contributions’ section.
  • After that, click on the ‘Edit’ option.
  • And again from the ‘Deduction for Benefits’ section, select the ‘new Deduction’ option.
  • Click on the Deduction drop-down menu, and choose the ‘New Deduction’ option.
  • Select a category, and type.
  • Add a description, this description will appear in the paycheck.
  • Enter the ‘% of Gross pay’, and ‘$ amount’ then, save all things.
  • Lastly, click on the ‘Ok’ option. 

How to Assign a Deduction Item to Employees for Online Payroll

If you want to add the same deduction that you have set up for an employee to other employees by assigning it to them then, you can do it all payroll service. Here we have the procedure for all Online payroll service

Steps to Assign a Deduction Item to Employees in QuickBooks Online Payroll

Follow the procedure, if you are a QuickBooks Online payroll user, and want to assign a deduction item to employees:

  • Select the ‘Employees’ option from the ‘Workers’ section.
  • Choose the employee from the list, whom you want to edit.
  • Click on the ‘Edit’ option, and then the ‘pay’ option.
  • Now go to section 5, and select the ‘+Add a new deduction’ option, or the ‘+Add Deductions’ option.
  • In the next step, select the existing deduction that you want to assign for your employee, from the ‘Deductions/contributions’ dropdown menu. 
  • Select the ‘$ amount’ option or the ‘% of gross’ option from the ‘Amount per pay period’ dropdown menu.
  • Enter the $ amount or the percentage, on that field, and do the same process for the company paid contribution as applicable.
  • Click the ‘Ok’ option, and then on the ‘Done’ option.  

Steps to Assign a Deduction Item to Employees in Intuit Online Payroll Full service

Assign a deduction item to employees in Intuit Online payroll full service, by following the below procedure:

  • Go to the ‘Employees’ section, and select the employee from the list.
  • From the ‘Deductions ad Contribution’ section, select the ‘Edit’ option.
  • Choose the ‘Add new Deduction or Contribution’ option. 
  • Now you have to select the name of the deduction, that you want to add (do it in a new window).
  • Define the ‘Annual Maximum’ and ‘Per-pay period deduction’ for the deduction you are adding. 
  • Follow the same procedure for the company’s contribution.
  • Click on the ‘Done’ option to complete the procedure. 

Steps to Assign a Deduction Item to Employees in Intuit Online Payroll Enhanced

Go through this process to assign deduction items to employees in Intuit Online Payroll Enhanced: 

  • Click on the ‘Employees’ option, ad select the ‘Edit’ option from the ‘deductions and Contributions’ section.
  • Go to the option of ‘Add a deduction’, and select the existing deductions to show up from the ‘Deduction’ menu. And choose a deduction for your employee.
  • In the next step, define the ‘Amount per pay period’, and the ‘Annual Maximum’ for the deuction that you are adding, and repeat it for the ‘Comoany’s Contribution. 
  • At the last, save all the chages, and click the ‘Ok’ option. 

QuickBooks Online Payroll Deduction Guideline

QuickBooks Online Payroll and Intuit Online payroll have some guidelines for the deduction process. Here we have mentioned some of the guidelines, check all the guidelines, and apply them while you are using the online payroll service. 

Guideline 1: Retirement Plan Deductions & Contributions

Guideline number 1 says that QuickBooks/Intuit has the retirement plan contribution for the tax-deferred. The employees’ wages are reduced by the amount of contribution before the taxes are calculated. 

Guideline 2: Cafeteria Plans (Section 125 Plans) 

Guideline number 2 says that the employees can pay dental, medical, and vision insurance premiums with the pretax paycheck deductions. The cafeteria plan is also known as the Section 125 plan, so don’t be confused. 

Guideline 3: Health Savings Account (HSA) Plans

Guideline number 3 says that an employee is eligible to set up a health savings account (HSA) if all the federal requirements are satisfied by the employees, like the high-deduction health plan. The employee can contribute to his/her HSA and you or the business owner who manage the accounts. 

These were the guidelines of QuickBooks deductions, it will be good to set up a voluntary deduction in QuickBooks Online payroll because it is very important. So you need to set up it properly.

The End line

So, here was the article regarding voluntary deduction in QuickBooks Online payroll. We tried our best to put information into it. Hope, you like it, and now you are clear with the voluntary deduction. Do payroll, and focus on your business without any tension. Further, if in case, you find any problem setting up voluntary deductions in QuickBooks Online payroll then you can connect with our Accountwizy ProAdvisors for the best solution.