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Setup a Deferred Compensation Plan

How to Set Up a Deferred Compensation Item with Employer Contributions #

Overview #

This knowledge base article provides step-by-step instructions on how to set up a deferred compensation item with employer contributions in Pro-Pay, a payroll software solution. This process involves configuring employer deductions, employee deductions, and pay-to-agency settings.

Steps #

1. Set Up Employer Deductions #

  1. Navigate to the Employer Deductions section in Pro-Pay.
  2. Set up two deductions as follows:
    • 401-k as a (D)eduction
    • 401-k Match as a (M)emo
  3. Check the appropriate boxes based on the taxability of the item.
  4. Enter the appropriate letter for W-2 box 12, 14, 11, or 10 (refer to Pro-Pay help instructions for guidance).

2. Set Up Employee Deductions #

  1. Go to the Employee Deductions section in Pro-Pay.
  2. Set up two deductions as shown in the image below:

3. Configure Pay to Agency (Optional) #

If you want to generate a check to the appropriate agency:

  1. Set up Pay to Agency for both amounts as shown below:
  1. If you wish to pay these amounts each pay date, change the Pay Frequency to “P”.

Note: Agency checks will be printed automatically when printing employee checks. A report will also be automatically generated showing all amounts deducted and matched by the employer.

Troubleshooting #

If you encounter issues while setting up the deferred compensation item:

  1. Double-check that all fields are filled out correctly in the Employer and Employee Deductions sections.
  2. Ensure that the appropriate boxes for taxability are checked.
  3. Verify that the correct W-2 box letter is entered.
  4. If using Pay to Agency, confirm that the Pay Frequency is set correctly.

Additional Help #

For more detailed information or assistance:

  • Access the Pro-Pay help menu within the software.
  • Visit our website at https://www.Paysoft.com for additional resources and support.

Feedback #

We value your input! If you have suggestions for improving this documentation or encounter any issues not addressed here, please contact our support team through the Pro-Pay software or our website.