This tutorial shows how to set up a Medical Expense Flexible Spending Arrangements (FSA) Deduction inside Payroll Mate® software.
A health Flexible Spending Arrangement (FSA) allows employees to be reimbursed for medical expenses. FSAs are usually funded through voluntary salary reduction agreements with your employer. Generally, no employment or federal income taxes are deducted from your contribution.
https://www.irs.gov/pub/irs-pdf/p969.pdf
Summary of Steps
This is just a summary; please click “Download Tutorial” for detailed instructions with screenshots.
- Click → Company from shortcuts
- Click → Deduction Categories
- Click → Add
- Enter Title, Abbreviation, Select Calculation (Fixed is the general method) and Paid by
- Enter Default amount (can modify at employee level) and Cutoff as applicable (Note: There is generally a yearly maximum allowed for this type of deduction)
- Checkmark the W2 Options as applicable
- Click Exemptions and checkmark Federal Income Tax, Social Security (employer/employee), Medicare (employer/employee) and Federal Unemployment
- Click → OK
You will apply the Medical FSA deduction(s) to each employee as needed
- Click → Employees from shortcuts
- Select the employee to edit
- Click → Edit
- The Modify Employee Wizard will open, Click → Next until you reach the Deductions page
- Checkmark to select Medical FSA and enter deduction amount
- Click → Next until you reach the end of the wizard
- Click → Finish