If child support payments need to be deducted from an employee's pay and forwarded to the government, follow these steps:
Step 1: Create a Liability Account
- Click the Chart toolbar icon
- Click the Liabilities tab
- Click Add
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In the ADD TO CHART OF ACCOUNTS window:
- Enter a liability Account Code not currently in use
- Enter a Description (account name) - eg. Prov for Child Support Payments
- Account Type will be liability
- GST Category with be 11. Non-reportable Receipts
- Click OK to save
- Click Cancel/Exit
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Step 2: Create an Expense Account
- Whilst still in Chart, click on the Expense tab
- Click Add
In the ADD CHART OF ACCOUNTS window:
- Enter an expense Account Code not currently in use
- Enter a Description (account name) - eg. Child Support Payments
- Account Type will be Other Expense
- GST Category with be 10. Non-reportable Payments
- Click on the Balance Sheet Link down arrow to select the Liability account just created
- Click OK to save
- Click Cancel/Exit
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Step 3: Create a New Deduction Category
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Step 4: Set up Child Support Payment as a Standard Pay Deduction
This is set up to deduct the appropriate amount from the employee's pay each pay period
- Click on the Employees tab
- Click on the applicable employee to highlight
- Click Select Employee
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In the Wages Record window for the employee, e.g. John Brown:
- Click on the Applicable Pay Rates tab
- Click on the Deductions tab
- Click Add
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- Name - select from drop down list - e.g. Child Support Payments
- Amount - enter amount to be forwarded to Department of Human Services per pay
- Identifier - optional - e.g. Child Support Number
- Notes - optional
- Include on Payment Summary checkbox should automatically default to ticked
- Optional Cashbook Account - this should automatically default to Allocate to 440 Child Support Payments
- Click OK to save
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Now, when the employee's pay is processed, the Child Support deduction will automatically be deducted.
Step 5: To Keep Track of the Child Support Payments That Have Been Withheld and Paid
- Click on the Review toolbar icon
- Select the Account Code i.e. 440 CHILD SUPPORT PAYMENTS to view child support payments withheld and paid
- Payments withheld are shown as a negative expense
- Payment made to the government are shown as a positive
- If the total is 0 - all payments have been made to the government
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Article ID CBP1501