How to Set up Voluntary Deduction in QuickBooks online Payroll Account?

A company plays vital roles, because in a company income coming is not enough, they also have to deal with […]

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A company plays vital roles, because in a company income coming is not enough, they also have to deal with expenses. One of the main expenses is paying peoples who are working for the income of company like employees and contractor.

So, QuickBooks online is the easy and efficient way in order to handle payroll. QuickBooks also contains add-ons like their payment plans. So, if you want to use add-ons you have to enroll for it.

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Types of Voluntary Deduction in QuickBooks Online Payroll Account

Medical, dental and vision insurance premium all are included in the voluntary payroll deduction but the garnishments are not come under the voluntary deduction.

The following are the deduction which is supported by the QuickBooks online payroll:

Mandatory Deduction

  • FICA Taxes
  • Federal, State and local income taxes
  • Wage garnishments

Voluntary Deduction

  • Health, Disability and insurance
  • Retirement Plans
  • Job Related Expenses

Pre-Tax Deduction

  • Medical and Dental Benefits
  • 401(K) retirement plans
  • Group-term Life insurance

Post-Tax Deduction

  • Wage Garnishment
  • Roth IRA Retirement Plan
  • Union Dues

Mandatory Deductions in QuickBooks Online Payroll Account


Income Tax is made up of two general taxes i.e Federal Insurance Contribution act and Federal Income Tax.

State and Local Taxes are known as the taxes which have there structure according to the state.


These taxes are for the special cases like if the employee has unpaid debt.

Employee Tax Contribution

With the help of W-4 form, your employee can choose certain amount to be deducted from their taxes.

Voluntary Deduction Pre Tax

Health serving plans are the pre tax deduction. This is the plan provided by the company for the health insurance of the employ.

Pre and Post Tax

These plans are life insurance and retirement plans. They are same as disability insurances and job-related expenses such as uniform, union dues and meals.

Other Expenses

This includes deduction from meal, travel, uniform, home office equipment, parking, transit, medical exams etc. These costs are deducted on the basis of post-tax.

Setup Voluntary Deduction in Online Payroll

Voluntary payroll deduction is the amount which is subtracted from the employee’s net pay in order to cover the cost of things like employees paid benefits which is offered by the employer or the deduction like charitable donation.

For the deduction like health insurance, retirement plans, HAS or FSA Plans etc with the help of this your provider is able to decide the amount to be withheld and determine the taxability.

Deduction vs Contribution

A deduction is the amount which is paid by the employee and it is deducted from each paycheck. The contribution is paid by the employer and it is count as an additional pay and wages.

Set up of New Deduction Items to Employees

Follow the following steps in order to set up of new deduction items:

  • First you have to add deduction item for your employees.
  • Once you add deduction item then select the item for which deduction is to be done.
  • Now the item appears as an option to select that the adding of deduction to the rest of your employees.

Assigning of Deduction item to Employees

Now you can add the same deduction which you have to set up for an employee to the other employees by assigning to them.

Deduction Guidelines

  • Retirement Plan Deduction and Contributions

There are many retirements plan contribution are tax deferred. Tax deferred means that before the certain tax are calculated the wages must be reduced by the amount of the contribution.

  • Flexible Spending Accounts

In this employee can pay medical, dental and vision insurance premium with pretax paychecks deduction.

  • Health Saving Account

The employees are eligible to set Health Saving Account (HAS). High-deductible health plan (HDHP). The company and the employees can contribute to their HAS.

Change or Delete Payroll Deduction item in Online Payroll

With the help of QuickBooks, you can easily make changes to employee payroll deduction like retirement, insurance or garnishment. If you need to change the deducted amount or remove the item from your employee.

Edit and Delete of a Payroll Deduction item

Once you remove a deduction in the employees setup, it will remain in the deduction list. The setup of employee can’t be removed completely from the list. For your future convenience you can rename it with a name “not in use”. Renaming of name is very helpful for you in order to avoid duplicity.

Depositing and Reporting

Once you deducted all the necessary payroll and taxes, including social security and Medicare. This all must be deposited and reported in state tax agency (keep in mind it must be up-to date and correct).


For the federal Taxes you must use direct deposit system. This direct deposit system is known as electronic fund transfer system. The deposit must be done on the set schedule. If you need any detail regarding the schedule then you can easily find it on IRS Website.

The sale tax payable is totally depends on your state tax agency.


Your reports must be submitted to federal and state agencies. The form no. 940, 941, 944 are to be submitted on paper or via efile for federal taxes.

And the state agencies will have there own rules and forms for reporting. You must be sure to check that they all are done with a proper procedure.

The both the procedure of payroll i.e deduction and reporting both can be complicated but with the proper utilization of resources and paying full attention to the detail you enter; your business will never have issues.

There are plenty of payroll deductions for the employees. The employer must know by all. Payroll deduction can be of any type i.e it can be a voluntary, pre-tax or post- tax. Knowing the detail of all different types of deduction will help you to understand where will be your paychecks go each pay period.

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What is the Deduction on Your Paycheck Which are Voluntary?

Voluntary Payroll Deduction:

checked Retirement
checked Health Insurance premium
checked Life Insurance Premium
checked Pre-Tax Health Savings Plan
checked Short term disability plans
checked Tools
checked Uniform
checked Certification Deduction

What are the Two Examples of Voluntary Deduction?

Voluntary deduction is the amount which is selected by the employ for the deduction from gross pay. Group life insurance and credit union deductions are the two examples of Voluntary Deduction.

What are the 2 Types of Payroll Deduction?

Mandatory Payroll and Voluntary Payroll Deduction are the two types of payroll deduction.

What are Voluntary Deds?

The deductions which require the employees’ consent are known as voluntary Deds.

What are the Types of Deduction?

The types of deduction are:

checked Social Security
checked Insurance Policy Deduction
checked Medical Care Tax
checked Retirement Deduction
checked Federal Income Tax

Are FICA Taxes are the Voluntary Payroll Deduction?

These are the statutory employee’s deduction from payroll. Failure to this can lead to penalization.

Can You Deduct Employee Wages?

One can claim a tax deduction for the salary, wages, commission, bonus and other compensation that you pay to your employees.

Is Social Security a Voluntary Deduction?

No, You didn’t require but voluntary withholding are the one way to cover any tax that may be due on your social security benefits and other incomes.

Which type of Payroll Deduction is Voluntary Apex?

Union dues, retirement dues, or contribution and flexible spending accounts for health care and dependent care expenses.

What is the Difference Between Deduction and Withholding?

Withholding are the amount which is taken out from every employee’s paycheck to pay their income taxes for that pay period.

Deduction are the amount which are taken out from the benefits and the donations that the employ has chosen.

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