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Company-Level Contribution Setup: Field-Level Help

In this article

Available on: Patriot Payroll (Basic and Full Service).

A contribution in Patriot Payroll is an employer-paid amount added to a payroll on an employee’s behalf. Examples include a 401(k) company match and the company’s share of health insurance premiums. Unlike deductions, contributions do NOT reduce the employee’s net paycheck — they represent money the employer pays in addition to the employee’s wages. Contributions appear on pay stubs for informational and tax reporting purposes.

After creating a company-level contribution, you must assign it to individual employees before it will appear in payroll. See “Company Level Contributions in Patriot Pay” and “Employee Level Contributions” for those steps.

This article describes every field on the company-level contribution setup screen.

Company Contribution Fields and Help

When you add or edit a company-level payroll contribution in payroll, you’ll need to complete the following fields on the Contributions screen:

  • Description: The description is the label that appears on employee pay stubs for this contribution. You may use any combination of letters, numbers, special characters, and spaces, up to 20 characters.
  • Active: By default, the contribution is active, meaning it can be assigned to employees and used in payrolls.
    • To stop using a contribution (for example, an old medical insurance plan that is no longer offered):
      • Uncheck the “Active” box to inactivate the contribution at the employee level.
      • When deactivated, the contribution no longer appears in the dropdown when assigning contributions to employees, and the Edit link is hidden at the employee level.
    • If you reactivate the contribution at the company level, you must manually reactivate the contribution on each employee’s record.
  • For Deduction: This optional field lets you link a contribution to a specific deduction. When linked, the contribution only calculates if that deduction is taken in the same paycheck. This is used for employer matches that only apply when an employee makes a corresponding contribution.
    See Company Contributions – Based On Deductions for more details.
  • Type: The contribution type determines how the contribution is treated for tax purposes. Most contributions are not taxable. Rare exceptions exist (such as taxable fringe benefits).
    • If the contribution is tied to a deduction (see “For Deduction” above), the Type field is pre-filled based on the deduction type.
    • If the contribution is not tied to a deduction, select the contribution type from the list. Choose “Other” if no other type applies.
    • The contribution type also controls which calculation methods are available in the Method field below.
  • Method: The method determines how Patriot calculates the contribution amount each pay period. Once a contribution is saved, the method CANNOT be changed. Here are the choices you will see under “Method”
    • Fixed-Dollar:  The contribution is a specific dollar amount entered either on this company-level setup screen or on each employee’s individual contribution record. Use this for a flat employer contribution amount (for example, the employer always contributes exactly $100 per pay period toward health insurance).
    • Percent of Gross Pay: The contribution is calculated as a percentage of the employee’s gross pay (total wages before taxes and deductions). Use this for employer matches calculated on total earnings.
    • Percent of Net Pay: This contribution is calculated as a percentage of the employee’s net pay after income taxes have been withheld.
      • Do not use “Percent of Net Pay” for SIMPLE IRAs if your company also has employees with section 125 (health care,etc.) deductions. Use “Percent of SIMPLE IRA Plan Compensation” listed below.
    • Single Formula: Must be tied to a corresponding deduction. T The contribution is calculated using a single formula based on the deduction amount it is tied to. Works for both percent-based and dollar-based deduction methods.
    • Tiered Formula: Must be tied to a corresponding deduction. The contribution is calculated using up to three tiers, each with its own formula, based on the deduction amount it is tied to. Use this for employer matches that have multiple match rates at different contribution levels (for example, 100% match on the first 3%, then 50% match on the next 2%).
    • Percent of SIMPLE IRA Plan Compensation: Available only when the contribution type is SIMPLE IRA. Calculates a percentage of the employee’s gross pay minus any Section 125 deductions per the IRS requirements. Use this method for SIMPLE IRA employer contributions whenever employees have any of the following Section 125 deductions:
      • Pretax Section 125
      • HSA – Single Limit
      • HSA – Family Limit
      • FSA – Medical
      • FSA – Dependent Care
  • Formula: Based on the Method selected above, enter either a flat dollar amount (for Fixed-Dollar contributions)or a percentage (for percent-based contributions). For formula-based methods, enter the formula used to calculate the employer match.
  • Taxability: This field is only relevant for Fixed-Dollar contributions. It lets you designate whether this contribution is taxable for S Corporation shareholder health insurance reporting purposes.
    • Leave as “Not Taxable” for standard contributions.
    • Select “Taxable” only if this contribution represents company-paid S Corp health insurance premiums that must be added to the shareholder-employee’s taxable wages.
    • For more details, see How To Add S Corp Health Insurance Premiums To Each Payroll
  • Limits: This optional field lets you set a maximum dollar amount for the contribution. Once the limit is reached, the contribution stops automatically.
    💡 Patriot does NOT automatically cap employer contributions to IRS limits. You are responsible for entering the correct limit based on your plan documents. Contribution limits and requirements vary by plan type, and combined employee/employer limits may also apply. Review your plan details or consult your plan advisor or administrator to determine the correct limit to enter.
  • W-2 Box: Select the W-2 box where this contribution amount should be reported at year-end, if required by IRS instructions. For many contributions, this field should be left blank. For certain contribution types (such as employer HSA contributions or group-term life insurance), Patriot may pre-fill this field.
  • W-2 Label: Available choices are determined by the W-2 Box selection above. Patriot may pre-fill this field for certain contribution types. If the W-2 Box field is blank, this field also remains blank.
  • Accounting Integration: If your payroll is integrated with Patriot Accounting, select an expense account and a liability account for this contribution. These accounts determine how the employer contribution is recorded in your general ledger each payroll.

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