Deriving a Payroll Item from a Retirement Plan

After you set up a retirement plan, you can derive deduction or employer contribution payroll items from the plan. For more information about retirement plans, see Retirement Plan Setup.

To derive a payroll item from a retirement plan:

1. Go to Lists > Employees > Payroll Items.

2. Click New to create a new deduction or employer contribution payroll item. For more information, see Creating Payroll Items.

   You can also click Edit beside an existing deduction or employer contribution payroll item that you want to edit.

3. In the Pay Code field, select the appropriate 401(k) pay code.

4. In the Derived From Type list, select Retirement Plan.

5. In the Derived From Plan list, select the retirement plan you want to derive the payroll item from.

   Note:

   If you derive a deduction from a retirement plan, retirement plans only appear in this list if the plan supports the deduction’s pay code. For more information, see Requirements for Deriving a Deduction from a Retirement Plan.

6. If you derive a deduction from a retirement plan, in the Default Rate field, enter the default rate as a percentage.

   For example, enter 2% for two percent or 2.00 for two dollars. For more information, see Applying a Default Rate to a Payroll Item.

   If you derive an employer contribution from a retirement plan, the rate is calculated using the retirement plan’s matching formula.

   Note:

   To apply specific rates to individual employees, you can edit the rate on the payroll item’s page. You can also edit the rate on an employee’s record. For more information, see Payroll Setup for Employees.

Related Topics

• Deriving a Pay Rate from Another Payroll Item
• Deriving a Pay Rate from a Payroll Item Group
• Payroll Item Derivation

General Notices