Set up employee deductions for a Flexible Spending Account

A Flexible Spending Account (FSA) lets your employees pay for certain covered health care, dependent care, and adoption expenses with pre-tax dollars.

To set up employee deductions for an FSA:

1. In the left navigation bar, click Employees.
2. Click the employee's name, and then click Edit employee.
3. Under Does this employee have any deductions?, click the pencil icon to edit a deduction, or click Add a new deduction to add one.
4. Select either an existing Flexible Spending Account or New deduction/contribution.
5. Select Flexible spending accounts for the type from the Deduction/contribution drop-down.
6. Select the type of FSA account from the Type drop-down:
   • Dependent care FSA — set aside part of your paycheck to pay for eligible dependent-care expenses.
   • Medical expense FSA — set aside part of your paycheck to pay for eligible medical and dental expenses.
7. Enter a description of the FSA account — it shows on the paycheck.
8. Select $ amount or % of gross pay for the Amount per pay period, and then enter the dollar amount or percent of the deduction . You can change the amount on the paycheck when you create it, if you need to. You can optionally enter the maximum amount per year that the employee can deduct.

For dependent-care reimbursements, we automatically enter the maximum annual amount set by federal regulations.

9. Click OK.

See also

• Set up company contributions to a Health Savings Account (HSA)
• Pre-tax paycheck deductions overview
• Make a fringe benefits adjustment
• View the Deductions and Contributions report
• Payroll topics

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