Set Up Compensations and Deductions

Compensations and Deductions are categorized into Types for tax reporting purposes. Each Type can have an unlimited number of Distributions, which contain the account designations used for creating journals when payroll is processed. This article covers setting up a regular wage compensation and a retirement deduction.

Compensation Information

1. From the Payroll menu, select Modify > Compensation Information.

2. Click the Edit icon next to the Salary/Hourly (Regular Wages) compensation.

3. Click the Add New Distribution link.

4. Enter a name for the Distribution.

Note: This name prints on the check stub or voucher when payroll is processed.

5. Click the Edit icon next to the Regular Pay type.

6. Enter the Regular Pay expense account, then click Update.

Tip: As a time-saving feature, the expense account entered in the Regular Pay type is automatically assigned to all pay types. Normally, only the Social Security and Medicare pay types are assigned to different expense accounts.

7. Click the Edit icon next to the Social Security pay type.

8. Enter the Social Security expense account, then click Update.

9. Click the Edit icon next to the Medicare pay type.

10. Enter the Medicare expense account, then click Update.

Note: Social Security and Medicare may share the same account (for example, a FICA Expense account).

11. Verify the Distribution Name and accounts are correct, then click OK.

12. Repeat the process to add other Regular Wage distributions such as Maintenance, Nursery, and Pastoral. When finished, review the Compensation Information page, then click Update to save changes.

Deduction Information

Deductions are added in a similar fashion to compensations.

1. From the Payroll menu, select Modify > Deduction Information.

2. Click the Edit icon next to the Elective deferral 403(b) deduction.

3. Click the Add New Distribution link.

4. Enter a name for the Distribution.

Note: This name prints on the check stub or voucher when payroll is processed.

5. Enter the Liability account. If there is an employer match for this distribution, enter the Matching Expense Account.
6. Review the Add new Distribution window, then click OK.
7. Review the Elective deferral 403(b) deduction page, then click Update to save changes.

A check mark now appears in the Distributions column for the Elective deferral 403(b) deduction.

8. To view only deductions that have been assigned distributions, click the Filters bar, select the Only Ones with Distributions radio button, and click Search. Only the Elective deferral 403(b) deduction is listed.

Updated May 21, 2026 01:39