Costpoint Online Help

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Step 1 Create the Payroll Deduction Code

Use the Manage Deductions screen to establish company-wide deductions and contributions.

You need to create a new deduction code, such as 401K, for your plan. Complete the screen to control how Costpoint calculates its deductions and contributions for code 401K. Pay special attention to the following fields as you complete this screen:

The Deduction Type controls how the system treats the deduction for W-2 (Box 13) purposes. Select the appropriate deduction type for your plan from the drop-down list for W-2 (Box 13 Code) purposes:

  • 401(k) Deferred Compensation
  • 403(b) Deferred Compensation
  • 408(k)(6) Deferred Compensation
  • 457 Deferred Compensation
  • 501(c)(18)(d) Deferred Compensation

The deduction Method controls how the employee deduction is calculated. One of the first two methods usually applies to a deferred compensation plan.

  • PCTGRS: This method multiplies the Rate % by the total earnings for the pay period.
  • PCTREG: This method multiplies the Rate % by the total of non-overtime pay type earnings for the pay period. You determine whether pay types are considered overtime by selecting the Overtime check box on the Manage Pay Types screen.
  • ADDGRS: Use this method for deductions to be added to gross salary.
  • FIXAMT: Use this method when a fixed dollar amount is deducted each pay.
  • NO DED: This method turns off a deduction and is generally used on a temporary basis.
  • PCTANN: This method multiplies the Rate % by the employee's annual salary.

If your plan's formula for eligible wages differs from these, you can fine-tune it with a Modify Code. You establish this code by completing the Manage Deduction Modify Codes screen before you create the deduction.

If a deduction is based on gross wages, you can use modify codes to subtract specific pay types, such as "Excess Life Insurance," from the gross before the Rate % is applied. If a deduction is based on regular wages, you can use this screen to add or subtract specific pay types, such as Incentive Payments, to regular wages before the Rate % is applied. After establishing Modify Codes, enter them on the Manage Deductions screen.

The Contribution Method controls how the company contribution is computed. You can use PCTGRS or PCTREG, with a Modify Code if needed, as you can for Deductions. You can also use PCTDED, which allows for matching contributions. This method multiplies the Rate % by the deduction amount to derive the contribution amount.

If you enter PCTDED, you must indicate how your company match operates on the Contribution subtask on the Manage Deductions screen. Click the Contribution button on the Manage Deductions screen with a contribution Rate % of zero to bring up the Contribution subtask. Remember that contribution rates are cumulative. You need to indicate in the Matching Percent column how much the company matches of the first 2%, the next 2%, and so on. Then Costpoint adds these amounts together to calculate the total match.

For example, a 3% rate gets a 2.75% contribution which equals, (2% at 100%) + (1% at 75%).

Rates Over Up to & Including Match %
0 2 100%
2 4 75%
4 100 0%

Enter the rate that is used to compute the deduction or contribution in the Rate % field on the Manage Deductions screen.

  • If your plan has a fixed deduction or contribution Rate %, enter it here.
  • If employees have the option to elect deductions at various rates, enter a deduction rate of 1%. This defaults in when you enter this deduction code for each employee on the Manage Employee Deductions screen. You can then edit the Rate column to meet each employee's individual elections.
  • If the company contributes at various rates based on a Contributions table, enter a contribution rate of 0%, and Costpoint automatically overrides it with the calculation from the table. Note that when you enter this contribution code for each employee on the Manage Employee Contributions screen, the Rate column displays 0%. Costpoint calculates the correct match when you run Compute Payroll.

The Deduction Ceiling Method field provides the option to make a ceiling Payroll Year or One-Time. To enter the legal limit for your Deferred Compensation Deductions, choose Payroll Year to establish a limit for each payroll year.

In the Deduction/Contribution Ceiling Amount field, enter the calendar-year limit on amounts that can be deducted. To establish the legal limit for your Deferred Compensation deductions, enter the current federal maximum. If any employee reaches this amount during the calendar year, the deductions stop for that employee for the remainder of the year.

Leave the Deduction/Contribution Start date field blank to indicate that the deduction starts immediately. If the deduction does not begin until a particular pay period, enter the start date of that pay period.

Leave the Deduction/Contribution Through date field blank for a deduction that continues indefinitely. If the deduction must stop after a particular pay period, enter that pay period's end date in this field. The Deduction/Contribution Posting Accounts are used to enter the G/L accounts for posting this deduction and this contribution in the payroll journal. You can click to select these General Ledger accounts.

Use the tabs and subtasks of this screen to control taxability. On the Federal tab, select the Federal Exempt option to stop all withholding for tax-free plans. State and Local taxability follows the Manage Federal Taxes screen choice unless you enter a separate election.