How to Deduct Child Support from Payroll in QuickBooks?

When it comes to payroll computation, it is quite important for employers to be careful enough in making the calculations […]

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When it comes to payroll computation, it is quite important for employers to be careful enough in making the calculations properly. One of the most crucial things that you cannot afford to miss out on is the child support withholding.

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Using QuickBooks, however, makes payroll management easy by letting users set up the requirements.

What is Child Support withholding all about?

The child support garnishment is a court-mandated deduction from an employee’s payroll, the notice of which is received by an employer to make sure he does not forget to deduct the amount from the income of the concerned employee.

The Wage Garnishment Order contains all necessary information to ensure the employers can directly deposit the amount for child support purposes. The order has the account or case number to help them post the money.

Most of the organizations use QuickBooks as their accounting software solution, which allows them to set up the wage garnishment payroll system to make calculating the final wage or income of employees easier and more accurate.

Why Deduct Child Support from Payroll in QuickBooks?

It is a legal liability of employers to deduct child support from payroll. When it comes to QuickBooks and if an organization has more than one employee with this kind of garnishment applicable to them, they need to have separate payroll items to be set up as the liability agencies need case numbers separately to handle things.

Deducting Child Support from Payroll in QuickBooks: Steps to Follow

  • Go to the Lists option on the menu bar
  • Choose Payroll Item List
  • Select Payroll Item
  • Click on New
  • Select EZ Setup or Custom Setup [Note: Follow on-screen prompts for EZ Setup]
  • Click Next
  • Choose Deduction
  • Click Next
  • Enter a name for the deduction you set up
  • Click Next
  • Type in the name of the liability agency. You may add it later if you aren’t aware of it
  • Click Next
  • Go to the Tax Tracking Type drop-down
  • Select None, if no prior instruction with regard to this is given
  • Choose Next
  • You will get the Default Taxes window
  • Click Next
  • The next appears the Calculate Based on Quantity window
  • Select Neither
  • Click Next
  • Never select Hours or Quantity as it might lead to incorrect calculation
  • The next window that appears is of Gross vs. Net
  • Choose Net. Choosing Gross will calculate the deduction before taxes
  • Type in Default Rate and Limit. Add percentage sign or a dollar sign, whatever is applicable
  • Click Finish
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