Benefits - Making Deductions

Learn about managing deductions in Franklin

Franklin supports a variety of pre-tax and post-tax deductions for W2 employees.

A pre-tax deduction is taken from the employee's total amount of pay before any taxes are withheld from their paycheck. With Franklin, you can add the following pre-tax deductions:

• 401(k): This is a tax-qualified, defined-contribution pension account that allows for pre-tax retirement savings.

• 403(b): This retirement plan is similar to a 401(k) and is offered by public schools, non-profit organizations, and government entities. It lets employees defer some of their salary into individual accounts.

• Section 12: This allows employees to choose between different types of qualified benefits.

• Simple IRA plan: This Savings Incentive Match Plan for Employees allows employees and employers to contribute to traditional IRAs set up for employees by smaller businesses or companies.

A post-tax deduction is taken out of the employee’s paycheck after all applicable taxes have been withheld. You can add the following post-tax deductions:

• Garnishment: This is a court-mandated withholding of an employee’s earnings from a paycheck for use toward debts, such as child support, federal debt, state debt, student loans, and credit card debt.

• Roth IRA: This is an Individual Retirement Account to which you contribute after-tax dollars. Your contributions and earnings can grow tax-free, and you can withdraw them tax- and penalty-free after age 59½ and once the account has been open for five years.

• Roth 401(k): This is a defined-contribution pension account that requires the income tax to be paid immediately, so the employee's real net income is reduced by the amount earmarked for savings. Employers can match employee contributions to a Roth 401(k), but those employer contributions must be matched in a separate traditional 401(k) deduction.

Administrators can manage deductions through the Benefits page.

To add a deduction:

1. Navigate to the Benefits page.

2. Choose the deduction you would like to add.

3. Select the name of the employee you wish to add the deduction for.

4. You can add the deduction in either a percentage or USD amount (please note that all deductions are calculated in USD)

5. Input the amount of the monthly employee contribution.

6. Input the amount of the monthly employer contribution.

7. Select Done.

After the deduction is set up, it will be reflected in the next upcoming payroll run and each recurring payroll run thereafter.