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This article is for Drake Accounting 2019. To view this article for Drake Accounting 2018, click here

All deductions must first be entered for the employer and then assigned to the employee (as necessary). A deduction cannot be deleted from the employer’s list if it is setup for one or more employees. Unlimited deductions can be set up for the employer.

Setting up a Deduction for an Employer

  1. Go to Employees > Benefits & Deductions
  2. Choose the Deductions tab on the left.
  3. Select the New button at the top left of the window to activate entry fields.

    • Deduction Name
      • Enter the name of the deduction (not the name of an employee).
    • Account
      • Select the drop-down menu to access the postable accounts list from the Chart of Accounts if using the bookkeeping function.
    • Amount
      • Enter an amount for the deduction. 
      • Format the number as dollars and cents if needed. 
      • If the deduction is supposed to be a percent, enter the amount as a decimal value less than one and has unlimited decimal places. 
      • Edit this amount on an individual employee basis by going to Employees > Add or Edit, and double-clicking the Amount field under the Deductions tab.
    • Ceiling
      • Enter the maximum yearly deduction. 
        When the employee reaches the ceiling amount for the year, Drake Accounting discontinues this deduction for that employee.
    • State
      • For multi-location employees, select the specific state to which this benefit applies. 
      • When choosing a specific state, the deduction will only apply to payroll in that state. 
      • Select <ALL> to have the deduction apply to payroll in all states.
    • Other Properties Based On

      • You must select Dollars/Cents or Percent. 
      • If Based on Hrs Worked is selected, you must also select either Dollars/Cents or Percent
        • When Based on Hrs Worked is selected, the deduction calculates by multiplying the number in the Hours Worked field on the Live Payroll (or ATF Payroll) screen times the Amount
        • If Based on Hrs Worked is not selected, the deduction calculates by multiplying gross pay by the Amount.
    • Deduct After Tax 

      • If one of those boxes are selected, the deduction is subject to the specified type of withholding.
        • Federal
        • Social Security 
        • Medicare
        • State
        • Local
    • Exempt From 

      • If any boxes are selected, the deduction is exempt from being subject to the specific type of withholding.
        • FUTA
        • SUTA
        • SDI
        • Garnish
    • Apply to
      • W-2 Box 10
        • Select this box to apply the deduction to box ten on the W-2.
      • W-2 Box 14
        • Select this box to apply the deduction to box 14 on the W-2. 
        • If the proper box is not selected, then the information does not flow to the W-2 correctly.
    • W-2 Box 12 
      • During W-2 processing, this code indicates which letters to enter for the Box 12 code.
    • Withholding Code
      • These codes dictate where the data appears on the W-2. It can also impact how data flows to other forms, reports, and payroll calculations. 
    • Matching Benefit
      • Enter the number of a benefit, and the deduction amount will match the benefit amount. 
      • To use this option, the benefit to be matched first must be set up and saved.
  4. Click Save after entering each deduction.
  5. Select Reset to reset the benefit back to the original amounts if you have made changes to the screen and want to revert to the original figures.
  6. Select Apply to All to update all deductions and benefits globally for all the employees. 
    • A message will display asking if you want to update all deductions and benefits on all applicable employees on the Deductions and Benefits tabs under Employee Setup.
    • Click Yes to save. Click No to exit.
  7. Click Exit once you finish setting up employee benefits.

Setting up a Deduction for an Employee

Unlimited deductions can be assigned to each employee.

  1. Go to Employees > Employee Setup
  2. Single-click the employee to whom the deduction(s) will be assigned
    • The active employee fills in blue
  3. Go to the Deductions tab to see a list of set up deductions that can be selected.
  4. Select the deduction (on the left) and click the arrow icon  to assign to this employee (it will appear on the right). 
    • The deduction displays under the Employee Deduction Name

    • Edit AmountPriority, and Ceiling if necessary. 
      • Priority sets the order in which the deductions will be subtracted from gross pay, and may be used in a short week when gross pay will not cover all the deductions.
  5. Once you add all desired deductions, click Save. 
  6. To delete a deduction from the employee’s list, select the deduction and click the arrow icon  to put it back in the first column under Available Deduction Name. 
  7. Select Save when finished.
  8. Repeat process for each applicable employee. 

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  Visit our Drake Accounting website

  Visit the Drake Software website

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