How to add a deduct code for a payroll garnishment
- Assign to Misc Category and make Description “Court Loan” or “Child Support”== Deduction—AFTER TAXES
- Add the Vendor information but no need to add a Vendor GL. May add that later.
- Then, in Manage Employees, Misc. Deductions, Add this deduct code.
- For GL Deduct Code, must add a GL account Liability number that points to Payroll-Other Withholdings.
In [File], [Preferences], [Payroll], Earnings/Deductions Codes, add a Miscellaneous Deduction (Category) After Taxes (Type) with Description “Garnishment.”
Add the Liability GL# to the Chart of Accounts
Add the Deduction Code into the Employees record under tab 5, Misc. Deductions. The first time you process payroll after adding this code, you must reset the employee record.
Wage expense is debited for Gross Wages
Tax liability is credited for Taxes owed
Garnishment Liability is credited for wage Garnishment
Bank account is credited for Net Pay
*when set up with vendor and default distribution, invoice automatically created
Tax liability is debited for Taxes owed- Bank account is credited
Garnishment is debited for garnishment owed- Bank account is credited
Processing payroll will create an unposted batch—When you post this batch it will create an invoice for the Vendor with whom you have associated this garnishment