Deductions are employee pay reductions to cover a specific liability or other obligation. To view your deduction settings, go to Admin > Company Settings > Deductions:
Deductions can be:
- Voluntary: 401K contributions, vision, dental, or health insurance
- Involuntary: garnishments for child support or bankruptcy
- Scheduled: withheld on scheduled payrolls (established on the employee record under Rates & Deductions)
- One-time: entered in the payroll batch as needed
Consult the diagram below and read on for a description of each major element of the deduction record.
Contents
Description
This value is a system-specific label for the deduction item record. It's visible on reports and appears throughout the system. Each value must be unique.
Abbreviation
This value is a system-defined abbreviation for the Description. It's used for column headers in CSV imports and to import data into step 4 of the payroll batch (Time Entry). Each value must be unique.
Type
This value instructs the system how to calculate the amount you enter when you add a deduction to an employee record. You can access the setup window for these panels on the employee record by clicking Add Deduction:
During setup, you must specify a Deduction value:
This value is followed by a parenthetical Type value that instructs the system how to calculate the Amount value entered in the prior step. See below for an explanation of each type.
| Value | Explanation |
| Dollar | The amount is a simple dollar-based value (up to two decimal places). |
| % of Gross | The amount is a percentage of the employee's pay (up to four decimal places) applied to gross taxable wages before pretax deductions are withheld. Enter 10% as "10.00", for example. |
| % of Net | The amount is a percentage of the employee's net pay (up to four decimal places) after taxes are withheld but before any deductions are withheld. Enter 10% as "10.00", for example. |
| $ per Hour (Reg and Ovt) | The amount is a simple dollar-based value (up to two decimal places), multiplied by the regular and overtime hours in the payroll batch to determine the deduction amount to be withheld. You might use this option for a state-operated worker's comp plans or employee restaurant drink deduction, for example. |
| $ per Hour (Reg Only) | The amount is a simple dollar-based value (up to two decimal places), multiplied by the regular hours (not including overtime) in the payroll batch to determine the deduction amount to be withheld. |
Frequency
This value determines how often the deduction amount is applied to payroll runs. See below for an explanation of each value option.
| Value | Explanation |
| Every | The amount is withheld from scheduled and unscheduled payroll runs regardless of the Payroll Run value. |
| Scheduled Only | The amount is withheld from all scheduled payroll runs regardless of the Payroll Run value. It isn't withheld from unscheduled payroll runs. |
| Scheduled Ignore BW3/W5 | The amount is withheld from all scheduled payroll except when a third bi-weekly run occurs in the month or when a fifth weekly run occurs in the month. |
| First Payroll | The amount is withheld only from the first scheduled payroll run of each month. |
| Second Payroll | The amount is withheld only from the second scheduled payroll run of each month. |
| Third Payroll | The amount is withheld only from the third scheduled payroll run of each month. It only applies if the pay frequency is weekly. |
| Fourth Payroll | The amount is withheld only from the fourth scheduled payroll run of each month. It only applies if the pay frequency is weekly. |
| One Time | The amount is withheld only on the subsequent payroll run. You can enter it on step 4 of the payroll batch (Time Entry). You cannot enter it on the employee record. |
| Unscheduled | The amount is withheld from all unscheduled payroll runs (only). |
Priority
In cases of multiple applicable deductions, this value determines the order in which those deductions are withheld. In cases when an employee did not earn enough wages to cover all deductions, the highest-priority items are withheld up to the employee's maximum allowable amount or percentage; the remainder posts as unpaid deductions.
Deduction Check
This value determines whether a check payment is generated to fulfill the deduction and, if so, how. See below for an explanation of each value option.
| Value | Explanation |
| None | No deduction check will be created. |
| Per Employee | One check is created for each employee assigned this deduction. Remittance information will be required for each employee that has this deduction, entered during deduction creation on the employee record (Rates & Deductions). |
| Company | One deduction check will be created for the combined totals of every employee deduction withheld. |
Miscellaneous Information
This value displays rules about how and where the system uses the item and implications for user interaction.