How to create a tiered percent 401(k) deduction with a matching benefit in Payroll in Microsoft Dynamics GP

Source: Microsoft Support

RAPID PUBLISHING

RAPID PUBLISHING ARTICLES PROVIDE INFORMATION DIRECTLY FROM WITHIN THE MICROSOFT SUPPORT ORGANIZATION. THE INFORMATION THAT IS CONTAINED HEREIN IS CREATED IN RESPONSE TO EMERGING OR UNIQUE TOPICS, OR IS INTENDED TO SUPPLEMENT OTHER KNOWLEDGE BASE INFORMATION.
INTRODUCTION
This article describes how to set up a tiered percent 401(k) deduction that has a matching benefit in Payroll in Microsoft Dynamics GP. 
More information
Many employers match an employee's 401(k) contributions up in a tiered manner.

For example, a company may decide to match 100 percent of an employee's 401(k) contribution up to 3 percent of the employee's gross wages. Then, a company may decide to match 50 percent of an employee’s 401(k) contribution from 3.1 percent through 5 percent of the employee’s gross wages. The employee can decide to withhold more than 5 percent of the gross wages. However, the amount that exceeds 5 percent of the gross wages is not matched by the company.

First, you have to set up the 401(k) deductions. Then, you have to set up the matching benefits.

Set up the first 401(k) deduction

  1. Use the appropriate method:
    • In Microsoft Dynamics GP 10.0, point to Tools on the Microsoft Dynamics GP menu, point to Setup, point to Payroll, and then click Deduction.
    • In Microsoft Dynamics GP 9.0, and in Microsoft Business Solutions - Great Plains 8.0, point to Setup on the Tools menu, point to Payroll, and then click Deduction.
  2. In the Deduction Setup window, type the code that you will use to determine the deduction in the Deduction Code field, and then type a description in the Description field.
  3. In the Start Date field, specify the start date. If the deduction has an end date, specify the end date in the End Date field.
  4. In the TSA Sheltered From area, click to select the appropriate check boxes.
  5. In the Method list, click Percent of Gross Wages.
  6. In the Deduction Tiers area, click Single. In the box next to the Single field, type a percent to withhold for the first employee matching tier. For example, assume the employee wants to withhold 5% of the gross wages for the 401(k) deduction. The company will match 100 percent of the employee’s contributions up to 3 percent of the employee’s gross wages, and the company will match 50 percent of the employee’s contribution for the next 2 percent of the employee’s gross wages. Type 3% for the first tier deduction.

    Note The percentage that you enter in the Deduction Tiers area will be the default percentage when you assign the deduction to employees. You can change the percentage when you assign the deduction to the employees.
  7. Click the appropriate frequency in the Frequency list.
  8. If it is required, enter any maximum deduction amounts in the Maximum Deduction area.
  9. If you want this deduction to be based on only certain pay codes, click Selected in the Based on Pay Codes area, and then insert the appropriate pay codes from the Pay Codes area.
  10. Type the appropriate information in the following fields:
    • W-2 Box
    • W-2 Label
  11. Click Save.

Set up the second 401(k) deduction

  1. Use the appropriate method:
    • In Microsoft Dynamics GP 10.0, point to Tools on the Microsoft Dynamics GP menu, point to Setup, point to Payroll, and then click Deduction.
    • In Microsoft Dynamics GP 9.0 and in Microsoft Business Solutions - Great Plains 8.0, point to Setup on the Tools menu, point to Payroll, and then click Deduction.
  2. In the Deduction Setup window, type the code that you will use to determine the deduction in the Deduction Code field, and then type a description in the Description field.
  3. In the Start Date field, specify the start date. If the deduction has an end date, specify the end date in the End Date field.
  4. In the TSA Sheltered From area, click to select the appropriate check boxes.
  5. In the Method list, click Percent of Gross Wages.
  6. In the Deduction Tiers area, click Single. In the box next to the Single field, type a percent to withhold for the second employee matching tier. For example, assume the employee wants to withhold 5% of the gross wages for the 401(k) deduction. The company will match 100 percent of the employee’s contribution up to 3 percent of the employee’s gross wages, and the company will match 50 percent of the employee’s contribution for the next 2 percent of the employee’s gross wages. Type 2% for the second tier deduction.

    Note The percentage that you enter in the Deduction Tiers area will be the default percentage when you assign the deduction to employees. You can change the percentage when you assign the deduction to the employees.
  7. Click the appropriate frequency in the Frequency list.
  8. If it is required, enter any maximum deduction amounts in the Maximum Deduction area.
  9. If you want this deduction to be based on only certain pay codes, click Selected in the Based on Pay Codes area, and then insert the appropriate pay codes from the Pay Codes area.
  10. Type the appropriate information in the following fields:
    • W-2 Box
    • W-2 Label
  11. Click Save.

Set up the first matching benefit

  1. Use the appropriate method:
    • In Microsoft Dynamics GP 10.0, point to Tools on the Microsoft Dynamics GP menu, point to Setup, point to Payroll, and then click Benefit.
    • In Microsoft Dynamics GP 9.0, and in Microsoft Business Solutions - Great Plains 8.0, point to Setup on the Tools menu, point to Payroll, and then click Benefit.
  2. In the Benefit Setup window, type a benefit code in the Benefits Code field.
  3. In the Description field, type a description.
  4. In the Start Date field, enter the start date.
  5. If the benefit has an end date, enter the end date in the End Date field.
  6. In the Subject To Taxes area, click to select the appropriate check boxes.
  7. In the Method field, click Percent of Deduction.
  8. In the Benefit Tiers area, click Single, and then type the percentage that you want to match. For example if the company will match 100 percent of the employee’s contribution up to 3 percent of the employee’s gross wages, and the company will match 50 percent of the employee’s contribution for the next 2 percent of the employee’s gross wages, then type 3% for the first tier benefit.
  9. In the Frequency list, click the appropriate frequency.
  10. In the Maximum Benefit area, enter any maximum benefit amounts.
  11. In the Based on field, click Deduction, and then click Selected. Next, insert the first deduction that you created into the Selected box.

    Note This deduction is the deduction that you created in the "Set up the first 401(k) deduction" section. This is the deduction on which the benefit will be based.
  12. In the Employer Maximum field, type the maximum percent of the gross wages that you want to match. For example, if the company will match 100 percent of the employee’s contribution up to 3 percent of the employee’s gross wages, and the company will match 50 percent of the employee’s contribution for the next 2 percent of the employee’s gross wages, then type 100% for the first tier benefit.
  13. Type the appropriate information in the following fields:
    • W-2 Box
    • W-2 Label
  14. Click Save.

    Set up the second matching benefit

  1. Use the appropriate method:
    • In Microsoft Dynamics GP 10.0, point to Tools on the Microsoft Dynamics GP menu, point to Setup, point to Payroll, and then click Benefit.
    • In Microsoft Dynamics GP 9.0, and in Microsoft Business Solutions - Great Plains 8.0, point to Setup on the Tools menu, point to Payroll, and then click Benefit.
  2. In the Benefit Setup window, type a benefit code in the Benefits Code field.
  3. In the Description field, type a description.
  4. In the Start Date field, enter the start date.
  5. If the benefit has an end date, enter the end date in the End Date field.
  6. In the Subject To Taxes area, click to select the appropriate check boxes.
  7. In the Method field, click Percent of Deduction.
  8. In the Benefit Tiers area, click Single, and then type the percentage that you want to match. For example if the company will match 100 percent of the employee’s contribution up to 3 percent of the employee’s gross wages, and the company will match 50 percent of the employee’s contribution for the next 2 percent of the employee’s gross wages, then type 2% for the second tier benefit.
  9. In the Frequency list, click the appropriate frequency.
  10. In the Maximum Benefit area, enter any maximum benefit amounts.
  11. In the Based on field, click Deduction, and then click 1. Next, insert the first deduction that you created into the Selected box.

    Note This deduction is the deduction that you created in the "Set up the second 401(k) deduction" section. This is the deduction on which the benefit will be based.
  12. In the Employer Maximum field, type the maximum percent of the gross wages that you want to match. For example, if the company will match 100 percent of the employee’s contribution up to 3 percent of the employee’s gross wages, and the company will match 50 percent of the employee’s contribution for the next 2 percent of the employee’s gross wages, then type 50% for the second tier benefit.
  13. Type the appropriate information in the following fields:
    • W-2 Box
    • W-2 Label
  14. Click Save.

Assign the 401(k) deductions to an employee

  1. On the Cards menu, point to Payroll, and then click Deduction.
  2. In the Employee Deduction Maintenance window, type an employee ID in the Employee ID field. In the Deduction Code field, type the first deduction code that you created.
  3. When you are asked whether you want to use the default information from the Deduction Setup window, click Default. The default entries from the Deduction Setup window will populate specific fields. However, you may want to enter a specific percentage of the gross wages that the employee wants to withhold from each paycheck.
  4. Click Save.
  5. In the Deduction Code field, type the second deduction code that you created.
  6. Click Save.

Assign the matching benefits to an employee

  1. On the Cards menu, point to Payroll, and then click Benefit.
  2. In the Employee Benefit Maintenance window, type an employee ID in the Employee ID field. In the Benefit Code field, type the first benefit code that you created.
  3. When you are asked whether you want to use the default information from the Benefit Setup window, click Default. The default entries from the Benefit Setup window will populate specific fields. However, you may want to change the matching benefit as necessary for specific employees.
  4. Click Save.
  5. In the Benefit Code field, type the second benefit code that you created.
  6. Click Save.

Include deductions and benefits when a pay run is processed

  1. Create the build in the Build Payroll Checks window. To open the Build Payroll Checks window, on the Transactions menu, point to Payroll, and then click Build Checks.
  2. In the Pay Period Date area, type dates for the pay period in the From field and in the To field.
  3. In the Include Pay Periods area, click to select the appropriate check boxes.
  4. In the Include Automatic Pay Types area, click to select the appropriate check boxes.
  5. Click Include Deductions.
  6. Click the appropriate deductions individually, click Insert, and then click OK.
  7. Click Include Benefits.
  8. Click the appropriate benefits individually, click Insert, and then click OK.
  9. Click Select Batches, select the batches for the pay run, and then click OK.
  10. Click Build.

DISCLAIMER

MICROSOFT AND/OR ITS SUPPLIERS MAKE NO REPRESENTATIONS OR WARRANTIES ABOUT THE SUITABILITY, THE RELIABILITY OR THE ACCURACY OF THE INFORMATION THAT IS CONTAINED IN THE DOCUMENTS AND THE RELATED GRAPHICS PUBLISHED ON THIS WEB SITE (THE “MATERIALS”) FOR ANY PURPOSE.

THE MATERIALS MAY INCLUDE TECHNICAL INACCURACIES OR TYPOGRAPHICAL ERRORS AND MAY BE REVISED AT ANY TIME WITHOUT NOTICE. TO THE MAXIMUM EXTENT PERMITTED BY APPLICABLE LAW, MICROSOFT AND/OR ITS SUPPLIERS DISCLAIM AND EXCLUDE ALL REPRESENTATIONS, WARRANTIES, AND CONDITIONS WHETHER EXPRESS, IMPLIED OR STATUTORY, INCLUDING BUT NOT LIMITED TO REPRESENTATIONS, WARRANTIES, OR CONDITIONS OF TITLE, NON-INFRINGEMENT, SATISFACTORY CONDITION OR QUALITY, MERCHANTABILITY AND FITNESS FOR A PARTICULAR PURPOSE, WITH RESPECT TO THE MATERIALS.
References
Properties

Article ID: 946688 - Last Review: 03/29/2016 14:33:00 - Revision: 7.0

Microsoft Dynamics GP 2013, Microsoft Dynamics GP 2010, Microsoft Dynamics GP 10.0, Microsoft Dynamics GP 9.0, Microsoft Business Solutions–Great Plains 8.0, Payroll - U.S.

  • kbnosurvey kbnomt kbexpertisebeginner kbmbsmigrate kbhowto kbexpertiseinter KB946688
Feedback