Setting up health savings account (HSA) deductions and linking them to a payroll vendor for payment

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The following procedure explains how to set up health savings account (HSA) deductions and link them to a payroll vendor for payment.

  1. Set up a vendor record for the client's HSA vendor in the Setup > Vendors screen, if one does not already exist.
    • Make sure that Payroll Agent is selected in the Vendor type field in the Main tab.
    • In the Method field, select the payment preference you will be using.
  2. Set up a payroll item (Deduction type) for the health savings account in the Setup > Payroll Items screen, if one does not already exist.
    • Make sure that the client's HSA vendor is selected in the Agent drop-down list.
  3. In the Payroll Items tab of the Setup > Employees screen, make the HSA payroll item active on the employee by marking the Active checkbox next to the HSA deduction item for that employee.
  4. Click the Ellipsis button button next to the HSA deduction item to open the Employee Payroll Item Settings dialog to add any necessary information, such as direct deposit allocations or limits.

Note: If the client matches the employees' contributions to an HSA account, you can follow the same procedure listed above using a health savings account match employer contribution item.

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