This tutorial shows how to set up a 403B Deduction inside Payroll Mate® software.
A 403(b) plan (also called a tax-sheltered annuity or TSA plan) is a retirement plan offered by public schools and certain 501(c)(3) tax-exempt organizations. Employees save for retirement by contributing to individual accounts. Employers can also contribute to employees’ accounts.
https://www.irs.gov/retirement-plans/irc-403b-tax-sheltered-annuity-plans
Summary of Steps
This is just a summary; please click “Download Tutorial” for detailed instructions with screenshots.
Employee Contribution
- Click → Company from shortcuts
- Click → Deduction Categories
- Click → Add
- Enter Title, Abbreviation, Select Calculation (Percentage is the general method) and Paid by
- Enter Default Rate for each quarter (can modify at employee level) and Cutoff as applicable
- Checkmark the W2 Options as applicable (W2 Box 12/Code E)
- Click Exemptions and checkmark Federal Income Tax (Note: This tutorial assumes that the 403B employee contribution payroll item is exempt from federal tax withholding)
- Click → OK
Employer Contribution
- Click → Company from shortcuts
- Click → Deduction Categories
- Click → Add
- Enter Title, Abbreviation, Select Calculation (Percentage is the general method) and Paid by
- Enter Default Rate for each quarter (can modify at employee level) and Cutoff as applicable
- Do not Checkmark W2 Options
- Exemptions (Note: Do Not checkmark taxes under exemptions. This tutorial assumes that the 403B employer contribution payroll item is NOT exempt from any taxes.)
- Click → OK
You will apply the Cafeteria Plan deduction 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 Tax Setup page
- Checkmark Retirement Plan under W2 Options
- Click → Next until you reach the Taxes page
- Checkmark to select 403B (Employee) and enter applicable percentage rate
- Checkmark to select 403B (Employer) and enter applicable percentage rate
- Click → Next until you reach the end of the wizard
- Click → Finish