To setup Simple IRA or 401K in Lizzy’s payroll module, please do the following:
- Go to Settings > Payroll > General and add your company’s matching % in the appropriate field. Then move on to Employee Compensation and add an item for the IRA/401K. Set the payment type to Company Contribution, attach a Liability and an Expense account and mark the Tax Type either Simple IRA or 401K depending on which one you are doing. Save this item that you entered, and then edit the item again. Now that it is added, we can modify all the taxes. Once you are in edit mode, uncheck ALL of the taxes below and save it.
- Go to Settings > Payroll > General > Employee Deductions and add a deduction to the list that you can assign to your employees for the portion they will pay into their Simple IRA. Make sure you set the deduction type to Deduction, and you assign a Liability account only. The tax type will be Simple IRA/401K (same as above). Check mark that you “Calculate using % of Gross Wages” and save it. Edit the deduction item and make sure ALL of the taxes are checked.
- Go to Settings > Payroll > Employee and add the deduction to the employee. If an employee ever decides not to participate in this offer, then remove the deduction from the employee. (Note: You do not need to add the income item to the employee. So long as the employee has a deduction value, the income item will add itself up to the matching %.)