Making decals in UE4 is very simple I will explain how I made them here:
Making sure your canvas size is 1024 x 1024 (or by the power of 2) I added a piece of dirt and nothing else around it.
I then colour pick the colour of the dirt, make a new layer below the original one and alt+backspace to fill it. Then Shift click the layer icon with the piece of dirt, go into channels properties and click save selection as channel which will create an alpha channel, now just save it as a TGA and go into UE4.
Then I imported the texture into UE4 right clicked it and selected create material - I then made the material a deffered decal and put the alpha into opacity, and bam done :) easy!