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How do I set up a Roth 401(k) deduction?

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Summary

Setting up a Roth 401(k) deduction.

Resolution

A Roth 401(k) plan deduction can be created using the existing Sage 50 401(k) formulas. Follow the steps below to modify and enable the Roth 401(k) deduction for all of your designated employees.

Section 1: Setup the benefit

  1. Click Maintain, Payroll, Payroll Settings.
  2. Click Benefits, Summary of Benefits.
  3. Click the Add Another Benefit button.
  4. Select Retirement Plan. Click OK.
  5. Select the Roth 401(k) option.
  6. In the Who contributes money to this plan? field, click the down arrow to select the contributors for this plan. Click Next.
  7. Select the contribution method for your company. In the Contribution Formula field, enter the appropriate amounts. Click Next.
  8. The Roth 401(k) Tax Settings - Employee Contribution screen will define whether the deduction is pre-tax or taxable. Make any needed changes. Click Next.
  9. The Roth 401(k) Tax Settings - Company Contribution screen will define whether the deduction is pre-tax or taxable. Make any needed changes. Click Next.
  10. On the GL Accounts - Employee dialog box, verify that the G/L Account Numbers listed are the correct accounts for the Employee contribution. Click Next.
  11. On the GL Accounts - Company dialog box, verify that the G/L Account Numbers listed are the correct accounts for the Company contribution. Click Next.
  12. The Summary of Benefits will be displayed. Click Finish to complete the Roth 401(k) setup in the Wizard.

Section 2: Configure the employee percentage

  1. Go to Maintain, Employees / Sales Reps.
  2. Click the Withholding Info tab.
  3. In the list, scroll down to the Roth 401(k) line.
  4. Enter a Percentage and specify if the employee is eligible for Catch Up contributions.
  5. Save the record and Close the window.