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FAQ

Creating a PERSI Roth 401k Deduction

PERSI Roth 401k deductions work just like other PERSI retirement deductions in the Payroll application. The key difference is choosing the correct deduction type when you set up the new deduction code.

Roth 401k vs. Traditional 401k

Traditional 401k contributions are pre-tax (they reduce the employee's taxable income). Roth 401k contributions are after-tax (they don't reduce taxable income now, but qualified withdrawals in retirement are tax-free).

Creating the deduction

  1. Navigate to Other Functions > Deduction Codes.
  2. Select Add at the top of the Deduction Code window.
  3. Enter a unique 4-digit code in the Code field.
  4. Enter the deduction name in the Desc. field (for example, "PERSI Roth 401k Fixed").
  5. For Deduction Type, choose one of the following:
    • Amt-PERSI Roth Plan - if employees contribute a fixed dollar amount each pay period. You'll enter the specific amount later when assigning the deduction to each employee.
    • %-PERSI Roth Plan - if the employees contribute a percentage of their gross pay. Enter a max pay amount and the percentage rate in the Rate Table when selecting this option.
  6. For Before/After Taxes, choose After Tax Deduction.
  7. For W2 Code, choose Roth 401k.
  8. Enter the remaining deduction details (Provider name, address, and whether you want a check to print) as you would for any other deduction.
  9. Select Save.

Assigning the deduction to employees

Once you've created the Roth 401k deduction, assign it to employees the same way you assign any other deduction.

  1. Navigate to Employees.
  2. Select the employee's name.
  3. Go to the Deductions tab.
  4. Press Edit.
  5. Select 0 in the Period field (this is the default for ongoing deductions).
  6. Select N in the dDpst field (unless you're using direct deposit for deductions)
  7. Use the Code dropdown to select the Roth 401k deduction.
    • If the deduction is a fixed amount, enter the dollar amount in the Amount field.
  8. Select Save.

The deduction will appear on the employee's next pay check. Additionally, the Roth 401k amounts will be automatically added to the PERSI 401k file that's sent to Empower.

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