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Deductions that apply to a payee's gross pay cannot be net protected.
Payee Account Reference
Bank account details that are specified on If the deduction header to which a payee deduction is linked identify the bank account into which a deduction is paid if payment specifies that payment of the deduction is facilitated via electronic funds transfer (EFT).
These bank account details can include a generic account reference that identifies the source of the payment. It is also possible to define an account reference on an individual payee deduction if a deduction payment needs to be identifiable down to the individual payee level. For example, if a payee has union fees deducted from their pay it may be necessary to include a unique payee ID in the account reference to identify the individual payee on whose behalf a payment is made when the deducted money is transferred to the union’s bank account.
It is not mandatory to define an account reference on a payee deduction and if not defined, the generic account reference that is defined on the linked deduction header is used to identify the source of deduction payments instead, an account reference is required to identify the source and purpose of a payment transaction. The account reference is populated against each transaction that is output to an EFT deduction file.
A generic account reference can be defined on deduction headers. That caters for payment scenarios whereby your business pays deductions into a single target account and therefore the account reference identifies, for example, your business as the source of the payment. Alternatively, an account reference can be defined at the payee deduction level so that the account reference that is populated against a transaction in the EFT deduction file can be specific to the payee to whom the transaction corresponds. For example, if a payee salary sacrifices their gross earnings into superannuation, the account reference against the transactions in the EFT deduction file may need to identify the payee’s superannuation fund membership number so that the fund can reconcile the payments against the relevant account on their end.
It is not mandatory to define an account reference on a payee deduction and if not defined, the generic account reference that is defined on the linked deduction header is used to identify the source of deduction payments instead.
Bank Details
If the deduction header to which a payee deduction is linked specifies that payment of the deduction is facilitated via electronic funds transfer (EFT), the deduction header may define the account details of the bank account into which the deduction is to be paid. Alternatively, if the deduction type that the linked deduction header represents must be paid into individual accounts for each payee as opposed to a centralised account, the Apply Bank Details on Payee Deduction option will be enabled on the deduction header in which case it is mandatory to define, at the payee deduction level, the details of the bank account into which the deduction is to be paid. Where that is the case, a Bank Details tab is enabled on the payee deduction and it is mandatory to specify the following information on the payee deduction:
name of the bank account into which the deduction is to be paid
BSB number that identifies the financial institution and branch where the bank account is held
the account number that uniquely identifies the target bank account
the name of the company or organisation to which the deduction is to be paid.
How to Add a Deduction
To add a deduction to a payee, follow the procedure below.
How to Add a Deduction | |||
If you do not already have the relevant payee record open in the Payee Entry screen, search for and open the relevant payee record in edit mode. | |||
2. | Navigate to the Deductions section on the Payee Entry screen and click Add at the top of the section. The Deduction Details dialog box opens. | ||
3. | In the Validity Date From field, select the date on which the deduction becomes effect. | ||
4. | In the Validity Date To field, select the date in which the deduction is to cease. Skip this step if the deduction is to be valid indefinitely. | ||
5. | In the Deduction field, select the name of the deduction that is to be added. This identifies the deduction header to which the payee's deduction will be linked. The Deduction Type field is automatically displays the deduction type that applies to the selected deduction. | ||
6. | In the Rate Type field, select Percent if the rate of the deduction will be specified as a percentage of the payee's gross or net earnings or select Fixed if the deduction rate will be specified as a fixed monetary value.
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7. | In the Calculate On field, select Net if the deduction amount is to be calculated based on a percentage of the payee's net earnings per pay period or select Gross if the deduction amount is to be calculated based on a percentage of the payee's gross earnings per pay period. | ||
8. | In the Rate Value field, key in the percentage of fixed amount that is to be deducted from the payee's earning per pay period depending on whether the applicable rate type is Percent or Fixed respectively.
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9. | In the Deduct From field, select Net if the deduction is to be from the payee's net earnings or select Gross if the deduction is to be from the payee's gross earnings.
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10. | In the Payee Account Reference field, key in the payee's unique account reference that will be used to identify deduction payments made as a result of this deduction if necessary. | ||
11. | If the deduction is to be a rolling deduction, specifying the total amount to be deducted over the course of successive pay periods on the Rolling Deductions tab. For more information, see How to Configure a Rolling Deduction below. | ||
12. | If the deduction is to be net protected, click the Net Protected tab and specify the net protection type and protected rate. For more information, see How to Configure a Net Protected Deduction below.
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13. | If the deduction type is Payee Super, click the Payee Super tab and select the name of the superannuation fund into which the money deducted due to this deduction will be paid. | ||
14. | If the deduction type is Payee Super and the deduction is from gross earnings, tick or un-tick the RESC field depending on whether amounts deducted via this deduction will be classed as Reportable Employer Superannuation Contributions. | ||
15. | Click Save. The Deduction Details dialog box closes and a new deduction is created and displayed in the list on the Deduction section of the Payee Entry screen. | ||
How to Configure a Rolling Deduction
To configure a rolling deduction, follow the procedure below.
How to Configure a Rolling Deduction | |
On the Deduction Details dialog box, click the Rolling Deduction tab if it is not already activated. For more information about how to display the Deduction Details screen, see How to Add a Deduction above. | |
2. | On the Rolling Deduction tab, click Rolling Deduction. A tick appears in the checkbox and a Total Amount and Outstanding Amount field is activated. |
3. | In the Total Amount field, key in the total monetary amount that is to be deducted from the payee's earnings over the course of successive pay periods. |
4. | Click on the Outstanding Amount field. The Outstanding Amount field automatically displays the amount you keyed into the Total Amount field to indicate that the monetary amount that remains to be deducted by the rolling deduction. |
5. | Specify any other deduction details as required and close the Deduction Details dialog box (for more information, see How to Add a Deduction above.). |
How to Configure a Net Protected Deduction
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A deduction cannot be net protected unless the deduction is configured to deduct money from the payee’s net earnings. Net protection for Child Support deductions is defined on the deduction header to which a deduction is linked and not on the deduction itself. Where this is applicable the net protection settings are inherited from the deduction header and cannot be overridden on the deduction. |
How to Configure a Net Protected Deduction | |
On the Deduction Details dialog box, click the Net Protected Deduction tab if it is not already activated. For more information about how to display the Deduction Details screen, see How to Add a Deduction above. | |
2. | On the Net Protected tab, click Net Protected. |
3. | In the Protected Type field, select Percent if the net protected amount is to be defined as a percentage of the payee's net pay for a pay period or select Fixed if the net protected amount is to be a fixed monetary amount per pay period. |
4. | In the Protected Rate field, key in the net protected percentage or net protected amount that is to apply per pay period, depending on whether the protected type is Percent or Fixed respectively. For example, if the protected type is Percent and the payee is to retain at least 60% of their net pay in each pay period after the deduction is applied, key in 60. If the protected type is Fixed and the payee is to retain at least $1500 net in each pay period after the deduction is applied, key in 1500. |
5. | Specify any other deduction details as required and close the Deduction Details screen (for more information, see How to Add a Deduction above). |
How to View or Edit an Existing Deduction
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You cannot modify a deduction if the payee is currently included in an open pay batch or has already been paid for the corresponding payee details validity period. |
How to View or Edit an Existing Deduction | ||
If you do not already have the relevant payee record open in the Payee Entry screen, search for and open the relevant payee record in edit mode. | ||
2. | Navigate to the Deductions section of the Payee Entry screen and in the list of deductions, click the Edit button next to the deduction that you want to view or edit. The Deduction Details dialog box opens, showing the details of the existing deduction. |  |
4. | If you need to modify the deduction, update the relevant fields on the Deduction Details screen as required. | |
5. | If you have made any changes to the deduction that you want to apply, click Save. Otherwise, to close the Deduction Details dialog box without saving any changes, click X in the top right-hand corner of the dialog box. The Deduction Details dialog box closes. | |