How to set up Payroll to automatically create AP transactions for employer contributions for employee benefits
- Go to Preferences > Payroll > Earnings/Deductions. Select a Deduction code, and then in the Vendor field, select the vendor that you pay for that item.
Click the save icon and exit out of Earnings/Deductions Codes by clicking the “X” in the upper right hand corner of the dialogue box.
If the deduction code you need does not exist in Earnings/Deduction Codes, you may create it by clicking on the ‘New’ icon at the top of the screen.
Make sure to include the Vendor to whom the AP check will be written. If you don’t do so you will get an error when processing payroll.
- Still on the Payroll Preferences, select the Employees On the List tab choose an employee, then select the Misc Deductions tab. (Existing deductions automatically display the Vendor defined in Step 1.) Add a new deduction to create an entry for the Employer's contribution, marking the Employer Contribution check box in the Add Deductions window.
Click Ok to add the deduction to the employee record. Note: You can easily distinguish the Employer Contribution on the Misc Deduction Tab as they are highlighted in green.
When you process payroll, the Employer Contribution will automatically be expensed out and an AP Transaction created.