Quick Search Results

    Not finding your answer?

    View More Results
    Top

    Deduct 401(k) loan repayment from employee paycheck

    Article ID: 1000830

    Overview

    If an employee has taken out a loan against their 401(k) account, you can set up a deduction for the repayment amount on their paycheck. This article explains how to do that.

    Details

    To create a deduction payroll item for a 401(k) loan repayment:

    From top toolbar of QuickBooks, choose Lists > Payroll Item List

    Click the Payroll Item button and select New.

    Choose Custom Setup and click Next

    Choose Deduction and click Next.

    Enter a name for the item (for example, 401K Loan Repayment) to use on paychecks. Click Next.

    Enter the name of the agency for the employee-paid liability and the account number for that agency. Click Next.

    Click Tax Tracking Type and select None. Click Next > Next.

    Under Calculate based on Quantity, select Neither and click Next.

    Choose Net in Gross Vs Net and click Next.

    Under Default Rate and Limit, add limits if necessary.

    Click Finish.

    To add the repayment payroll item to the employee profile:

    From top toolbar of QuickBooks, choose Employees > Employee Center, and double-click the employee's name.

    Click the Change tabs drop-down arrow, and then select Payroll and Compensation Info.
    QuickBooks 2013 and later: Click the Payroll Info tab.

    In the Addition, Deduction and Company Contribution box, click the next available space under Item Name. A down arrow will appear.

    Click the down arrow to display the list of payroll items and select the deduction item you created for the 401K loan repayment.

    Press Tab key to move to amount column and enter the repayment amount per period and any limits.

    QuickBooks will automatically display and calculate the 401k loan repayment item and amount specified, in the Preview Paycheck window. You may manually change the default amount on the paycheck detail, if necessary. If you entered a limit, QuickBooks will stop deducting when the limit is reached.

    2 comments

    Walter5/8/2013

    I had already done all of the above. What this does not tell me is where to find the deduction so I may transfer it to the 401k account as payment.

    Reply

    Susan5/24/2013

    Hi Walter,

    Thanks for your comment. This article should help: Set up and pay scheduled or custom (unscheduled) liabilities. I have added the link above.

    Comments can not be added at this time.

    Top Answers

    Resources

    Most Used Forms

    Find and download individual and federal forms required for your business.

    Payroll Tax Support

    Stay in compliance, ensure you're up to date on all necessary tax agency information from Federal to State agency

    ViewMyPaycheck

    Give employees 24/7 access to payroll information they need.