Learn about retirement plan deductions and contributions in Online Payroll.

You may be wondering about retirement plan deductions and contributions. We explain how to set them up, assign, and remove them.

Annual deduction, company contribution limits, and W-2 reporting

Deduction Limits

There are two limits for each type of retirement plan supported. One limit is used for employees under 50. And one limit is used for employees 50 years of age and over (includes employees turning 50 in the same calendar year).

  • After-tax Roth deduction limits are not supported. When setting up these deductions, be sure to manually enter the limit. If the employee is eligible for the catch-up limit, enter this amount as the annual limit. If a limit is not set, they may contribute past the limit resulting in the need for payroll corrections.
  • Combine deductions limits. Under IRS guidelines if you're using both a 401(k) and Roth 401(k) deduction item in the same calendar year for an individual employee the combined deduction of both items cannot exceed the annual 401(k) limit in a given year.If an employee switches from a traditional 401(k) to a Roth or vice-versa the limit will need to be entered and monitored manually so that the total combined deduction doesn't go over the limit. This can be done by taking the annual limit and subtracting what was already deducted under the previously used 401(k) item. Then simply add that figure to the limit of the new item. That modified limit will need to be removed (or modified in the case of a Roth 401(k) at the start of the next calendar year to avoid having the deduction stop prematurely.
  • SEP-IRA games. Under IRS guidelines, SEP-IRA plans don't need to be reported on the employee's W-2. However, their W-2 must have box 13 for retirement plans checked. To have this done, please contact customer support before the end of the current year in the 4th quarter.

Annual Maximums for Company Contributions
For company contribution limits, refer to IRS Retirement Topics - Contribution Limits or your plan sponsor.

Set up a retirement plan deduction and company contribution

When setting up a deduction for a Retirement plan, the plan you select will automatically set up a company contribution item to be used if needed.

After-tax Roth 401(k) and 403(b) aren't available as company contributions through our service. This is because the entire contribution should be paid and reported separately through the provider — not  through the same account as the employee after-tax deduction funds.

Intuit Online Payroll/Intuit Online Payroll for Accountants

  1. Select Setup.
  2. Under Payroll, select Deductions / Contributions.
  3. Select Add a New Deduction/Contribution.
  4. For Category, select Retirement Plans.
  5. For Type, select the applicable retirement plan.
  6. Enter the name of the provider or plan to name the payroll deduction/contribution item.
  7. Select Ok.

  8. If you export to your accounting software, be sure to map this item in your export settings.

Intuit Online Full Service Payroll

Contact Payroll Support for assistance.

QuickBooks Online Payroll/QuickBooks Online Full Service Payroll

  1. From the left menu select the Gear icon. Then select Payroll Settings.

  2. Under Payroll, select Deductions / Contributions.
  3. Select Add a New Deduction/Contribution.
  4. For Category, select Retirement Plans.
  5. For Type, select the applicable retirement plan.
  6. Enter the name of the provider or plan.
  7. Select Ok.

Assign a retirement plan deduction or contribution to an employee

Assign a retirement plan deduction or contribution to an employee.

Intuit Online Payroll/Intuit Online Payroll for Accountants

  1. Select Employees.
  2. Select the employee's name.
  3. Select Edit in the Deductions & Contributions section.
  4. Select Add new deduction or contribution.
  5. Select the deduction/contribution.
  6. Enter the amount per period under the Employee Deduction and/or Company Contribution.
  7. Select Save. Then select OK.

Intuit Online Full Service Payroll

Contact Payroll Support for assistance.

QuickBooks Online Payroll/QuickBooks Online Full Service Payroll

  1. From the left menu, select Workers, then Employee.

  2. Select the employee's name.
  3. Select the pencil icon in the Pay section. Scroll down on the deductions section. Then select the pencil icon.
  4. Select Retirement Plans under Deduction/Contribution type. Then select the type of Retirement plan
    Assign a retirement plan deduction or contribution to an employee in QuickBooks
  5. Enter the name of the provider. And the amounts per pay period.
  6. Select Done.

Remove a retirement plan deduction for an employee

Removing a deduction does not delete previously deducted amounts from the employee's paycheck records.

Intuit Online Payroll/Intuit Online for Accountants

  1. Select Employees.
  2. Choose the employee's name.
  3. Select Edit in the Deductions & Contributions section.
  4. Select the trash can icon next to the deduction to remove it.
  5. Select Confirm to complete removal of the deduction.

Intuit Online Full Service Payroll

Contact Payroll Support for assistance

QuickBooks Online Payroll/QuickBooks Online Full Service Payroll

  1. From the left menu, select Workers, then Employee.

  2. Select the employee's name.
  3. Select the pencil icon beside Pay.
  4. Scroll down to the deduction section and select the trash can icon.
  5. Select OK.