A payee may request, or may be obligated, to have deductions taken from their gross or net pay. Where this is the case, the relevant deductions must be added to the Payee record so that the relevant deduction amounts will be automatically deducted from the payee’s earnings at the Gross Deductions and/or Net Deductions stages of a pay batch.
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When you add a deduction to a Payee record you must link the deduction to a deduction header. The deduction header defines certain attributes of the deduction such as the deduction type (for example: child support, payee superannuation) and the bank account into which the deduction is to be paid. Therefore, it is important to ensure that you link a payee deduction to the correct deduction header.
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The relevant deduction headers must be configured under |
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Payroll > |
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Maintenance > Deduction Header before you can add payee deductions. |
Deduction Validity Period
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A deduction is automatically applied in a pay batch if it is valid on the end date of the pay period to which the pay batch corresponds. That is, the pay period end date of the pay batch must fall within the validity start and end dates of the deduction.
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Other conditions, such as net protection rules and availability of sufficient gross or net earnings may also determine if a deduction is applied. |
Rate Type & Rate Value
The rate type determines whether the deduction is to be deducted as a fixed amount (for example: $100.00 per pay period) or a percentage of the payee's earnings (for example: 5% of earnings per pay period). If the rate type is percentage based, you must specify if the deduction is calculated based on a percentage of the payee's gross or net earnings.
The rate value specifies the fixed monetary amount or percentage that is to be deducted from the payee's pay per pay period.
Because a payee can be included in multiple pay batches for the same pay period, the system takes into account any prior deductions made during the same pay period. For example, if a payee requires $100 to be deducted from their pay each pay period and the entire $100 deduction is applied in the first pay batch that is processed for a given pay period, that deduction is not applied again if the payee is included in another pay batch for the same pay period. However, if the deduction was based on 2% of earnings (gross or net) rather than a fixed amount, the deduction will be applied each time the payee has any earnings in a pay batch so that the total amount deducted during a given pay period will equal 2% of the payee’s total earnings for the pay period.
In version 11.34 and 11.37 onward it It is possible to define a default rate type and rate value on a deduction header so that the same rate type and rate value can be applied to all payee deductions that are linked to the same deduction header. Where this is the case, the rate type and rate value is inherited from the deduction header and cannot be defined or overridden on the payee deduction itself.
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For deductions of a type of Payee Superannuation, the superannuation fund to which the deducted amounts will be accrued must be selected as part of the process of configuring the deduction. Only those superannuation funds that are defined under Portal > Pay > Payee > Payee Maintenance > Payee Entry > Superannuation Details for the payee can be selected on a deduction. Therefore, ensure the relevant superannuation fund had been added to the payee's superannuation details before attempting to configure a deduction of this type.
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