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Overview
Deductions are another key factor part of the Payroll Management Section. It reduces the total gross amount computed in employee earnings applicable in a given pay period. Earning codes can be searched, added, modified and deleted in this function. Each deduction can contain many details pertaining to calculation methods, activity status, minimum and maximum deduction amounts, pension administration etc. The earnings minus deductions defined for an employee gives payroll management the net pay to be applied. As earnings and pay are affected by Deductions, this function is another calculation aspect that directly relates to cost items mentioned in the Cost Item Management section. A separate section in this function deals with the cost item and deduction relationship for deduction calculations.
Navigation
Payroll Management ► Support Entities ► Deduction Management ► Deductions
Deductions screen Fields and Tabs
Field | Description |
Code | ID for the Deduction. It is a system generated code. |
Active | By Default, is checked and indicates that Deduction has been previously used in Payroll Calculations. Active can be unchecked so that it is not taken into account in future. |
Employer Share | Indicates if Deduction is an employer Deduction. |
Effect on pay | By Default - is checked. Indicates if the deduction affects the pay. Normally, employer's deductions do not affect the pay. |
Printed on Pay Stub | If checked, deduction will be printed on pay slip. |
Apply Penalties | If checked, a Penalty will be applied affecting Deductions. |
Allow Arrears | If checked, Arrears will be applied to Deductions. |
Reduce Arrears | By Default - unchecked. Select box if required. See Arrears for more details. |
Cost Item Coding Block | If checked, the Coding Block distribution for specified Deduction will be considered on Cost Items. |
Deduction Coding Block | If checked, the Coding Block distribution for specified Deduction will be considered on other Deductions. |
Mandatory | If checked, Deduction will be mandatory. |
| Allow More Than Once Same Deduction On Same Employee Assignment | Default value is FALSE.If this value is true, system will allow same deduction code in automatic deductions within same Employee Assignment |
| Allow To change Vendor In Automatic Deduction | Default value is FALSE. If this value is TRUE, then system will allow to change default vendor in Automatic Deduction |
| Is Retroactive Pay Period Mandatory In DPP | Default = FALSE. When TRUE, in DPP the field Retroactive pay period is mandatory. |
| Legacy Reference | Defines the Legacy Reference associated with the Deduction. |
Inactive Date | By default, this field is empty. Indicates when Deduction is no longer available. Once Active is checked, Inactive Date will produce current date. |
Calculation Sequence | Calculation sequence to ensure that the calculation is processed in the right order. |
Deduction Tax Type Value | This menu will automatically display Employer Taxable when Employer Share is checked. Deduction Tax Type Value will automatically display Tax Credit and Tax Exemption when Employer Share is not checked. |
| Is Pension | If it is true then this Deduction is used Reduction Deduction entity. |
| Is Retroactive pension | This boolean is used when the keyword 'sumretropension' is used in the formula of Reduction Deduction entity. |
| Is Basic Only Tax | This boolean is used when the keyword 'sumbasiconlytax' is used in the formula of Reduction Deduction entity. |
| Recovery tax code | Official Code that will be used to print on tax forms in Canada. |
Deduction Type | This will specify a specific Type of Deduction for calculation purposes. |
| Deduction type for reports | Default NULL |
Vendor | To define the vendor for Deduction to be slected from the lookup button. |
Based on Deduction | To define the deduction base for Deduction to be slected from the lookup button. |
Minimum Hours | Minimum hours for this deduction to be applied. |
Reduction Tax | Percentage of reduction on taxes. |
Rate | Percentage Rate of Deduction. |
Amount | Deduction Amount. |
Maximum Reduction | Maximum reduction amount. |
Exemption | Exemption amount before this deduction is to be applied. |
Minimum Salary | Minimum salary for this deduction to be applied to. |
Maximum by Pay | Maximum Deduction amount per pay. |
Monthly Maximum Amount | Maximum Deduction allowed per month. |
Annual Maximum Amount | Annual maximum Deduction allowed. |
Maximum Age | The age at which the Deduction should stop. |
Name | Description of the Deduction. |
Description | Detailed description of the deduction. |
Pay Stub Text | Any other additional text, besides the deduction description, that should be printed on the pay stub. |
Explanation | Detailed description of the deduction or any other useful information regarding the use of the deduction. |
Inactive Reason | Explanation on why the deduction is not being used. |
Loan | If checked, Loan amount will be adjusted from employee’s deduction. |
Loan Interest | If checked, Loan Interest amount will be adjusted from employee’s deduction. |
Interest Type | To select the interest type which can be Simple or Compound. |
Financial Coding Block Credit | Financial Coding Block for Credit. This entry is optional. If not entered, the default code is used from Cost Items or Automatic Cost Items. If there is no Cost Items coding, it will come from Employee Assignment. |
Financial Coding Block Debit | Financial Coding Block for Debit. If not entered, the default code is used from Cost Items or Automatic Cost Items. If there is no Cost Items coding, it will come from Employee Assignment. |
Retroactive Payment Deduction | Allows retroactive deductions for payment. |
Deduction Cost Items Tab | It lists the deductions and cost items relationship for deduction calculation. It is available from the cost item form and from the deduction form. |
Reduction Deduction Tab | Uses for reduction any other created Deduction from the current Deduction. |
Institution Tab | Allows selecting the institution for deduction. |