Answer:
This can be set up as either a flat amount or a loan paid back in automatic installments.

Option I: Flat Amount

1. Click Maintain and select Default Information, Employees.
2. Go to the Employee Fields tab and scroll down to the first available line.
3. Enter a name for the deduction, select the appropriate GL account and click [OK].
4. Click Maintain and select Employees/Sales Reps.
5. Select the employee (that you are setting this up for) from the drop down list and go to the Employee Fields tab.
6. On the line for the new 401k Loan, clear the Use Defaults box and then enter the deduction amount (as a negative amount) in the Amount column.
7. Click Save and then click Close.
8. Because this is a deduction it is taxable by default, so no other changes needed.

Option II: Automatic Installments

1. Click File, Payroll Formulas, User-Maintained.
2. Enter Loan401K as the Formula ID.
3. Enter Loan_401K 19 as the Name, where 12 is the current payroll year (2019).
4. In the Effect on gross pay box, select Subtracts from gross.
5. Leave Filing status as All.
6. In the How do you classify this formula? box, select Deduction.
7. In the Formula box, enter the following: Note: To create a new line in the formula, press CTRL+J

LIMIT=1000;
A=100;
B=-YTD(Loan_401K)+Loan_401K;
C=A-((A+B)-LIMIT);
D=IF((A+B) ANSWER=-D

Note: This calculation works for loans with any loan balance, whether they add up to the principle exactly or not (In our example, there will be ten payments of $100.00 to equal the loan of $1000.00).

9. Click Save and then select Close.
10. Click Maintain, Employees/Sales Reps.
11. Select the employee (that you are setting this up for) from the drop down list and go to the Employee Fields tab.
12. On the line for the new 401k Loan, uncheck the Use Defaults box, enter a check mark in the Calculated box, and then select from the drop down list Loan_401K in the Formula column.
13. Click Save and then click Close.