Before You Begin: Ensure that you are familiar with the concepts in the topic Deductions and the Deductions Tab.
Deferred compensation and pension plans require existing deductions to be set up before they can be added to a deferred compensation or pension plan. The deductions are the amounts that employees are able to contribute to their deferred compensation plans or pension plans are determined by the deductions configured in the Deductions tab of Payroll Setup > Earnings and Deductions.
The number of different deductions that you might to configure depends on the number of different plans or contributions amounts that employees can make into their plans. For example, if one group of employees contributes based on a percentage amount to their 401(k) account, and a second group contributes a flat dollar amount to their 401(k) accounts, two different deductions must be created.
Configuring the deductions that represent plan contributions follows the normal process. That is, selecting Deferred Compensation in the Tax Type drop-down list for US employees or selecting Pre Tax in the Tax Method Canada drop-down list for Canadian employees.