Deduction Codes - Deduction Tab

Access this tab using Maintain>Payroll>Deduction Codes.

Use this form to add a new Deduction Code or edit an existing one. The deduction codes entered are used throughout the system. Since the system uses deduction codes when it's calculating pay, creating an accounting entry for payroll, calculating and reporting W-2 information and other tax reports, and reporting; you must set up these codes in order to use many of the forms on the Timesheets and Activities menus.

Use this tab to add a new Deduction Code or edit an existing one. You must assign a General Ledger liability account on this tab, in order to create an accounting entry.

 

Code: Enter a Deduction Code. You should make the first eight characters of the code unique so that the paycheck displays a useful identifier. We recommend limiting your entry to strictly alphabetic characters (A through Z) or numeric characters (0 through 9), and avoiding the use of symbols.

Status: Specify the status of the Deduction Code. When creating a new code, accept the default status, A (Active), or select I (Inactive) or D (Discontinued), from the drop-down list. The status can be changed at any time. Below are valid status entries and their descriptions:

• Active - An active status allows payroll to be processed using this code.
• Inactive - Set a code to inactive when it is not used regularly, but it could be used at some point. A warning message appears when attempting to use an inactive code. The warning message is for notification only; the code can still be used in a payroll process.
• Discontinued - Designate a code as discontinued when it is no longer being used. The system does not allow payroll to be processed using a code with a discontinued status.

Title: Enter the title of the Deduction Code.

Liability Account: Enter the General Ledger liability account for this Deduction Code. The account must be an existing General Ledger account that is not a subledger-type account. The account must have a status of Active or Inactive.

W-2 Information Box Number, Box Code: Select W-2 Box Number 7, 8, 10, 11, 12, or 14 if this Deduction Code falls into one of those W-2 categories.

• Box 12 requires a corresponding box code, and cannot be used for anything other than the items specified by the box codes. You must enter one of the following Box Codes: A-H, J-N, P, R-T, V, W, Y, Z, AA, BB, CC, DD, EE, FF, GG, or HH.
• Box 14 should be used for any other information you want to give your employee. You can enter up to five alphanumeric characters. The Box Code serves as a "label" for the optional amount displayed in box 14.

To have the deductions and taxes from this Deduction Code appear in W-2 boxes 1-6, 16, 17, 18, and/or 19 (for Federal, State, and Other Taxes), select the check boxes on the Taxes tab and leave the W-2 Box Number box on this tab blank.