Overpayment Deduction

If a payee has been overpaid and the funds need to be deducted from a future pay, a deduction needs to be setup in the payee record.

 There are 2 parts to setting up a deduction:

 Below are the steps required to setup an overpayment deduction.

Instructions

PART ONE – Deduction Header

A deduction header must be created before a deduction can be setup in the payee record.  If a deduction header already exits, go to Part Two.

1. Go to Payroll > Maintenance > Deduction Header
2. Click the + symbol to add a new deduction header – click Search Deduction Headers to see if an Overpayment deduction header already exists
3. Enter the following required fields:
1. Deduction Type – must be Standard
2. Name - must be unique
3. Description
4. Apply Order – this determines the order the deduction will be deducted from payees' earnings. For example, a value of 0 indicates that deductions linked to the deduction header will be deducted before those with an apply order of 1,2,3 and so on.
4. Untick EFT Payment
5. Complete the other fields if required – recommend selecting Show On Payslip
6. Click the + symbol to add a Validity Period and enter a Validity Start Date
7. Click the Pencil symbol to open the Deduction Settings screen and select the required options.
   1. Closed Deduction Applied to Adjustments – includes the expired deduction in an adjustment batch if it was valid during the period being adjusted
   2. GST – GST is applied if deduction is applied to a payee with Company as the tax type
   3. Reduce Superable Salary – reduces the earnings that the superannuation guarantee amount will be calculated on
   4. Gross Earnings Pay Code Group (v 11.36 onwards) – select a Pay Code Group to determine gross earnings.  Only required if all earnings Pay Codes shouldn’t be included in the gross wage calculation.
8. Click OK > Click Save

PART TWO – Payee Deduction

A Standard deduction header must be created before a payee deduction can be added.

1. Go to Payroll > Payee
2. Search for the relevant Payee and open their record
3. Click the Deductions tab
4. Click the + symbol to add a new deduction
5. Enter the following details:
   1. Validity Start Date
   2. Deduction – select the Deduction Header created in Part One
   3. Rate Type– this will generally be Fixed. If Percent is selected, either Gross or Net will need to be selected in the Calculate On
   4. Rate Value– the percentage or fixed amount that is to be deducted
   5. Deduct From– if the overpayment has been corrected in an Adjustment batch, select Net otherwise select Gross
6. If it’s a Net deduction and it is to be net protected (ie a certain amount of their net pay must be left after the deduction), click the Net Protected tab, select the option then select the Protected Type and enter the Protected Rate
7. If the deduction rate isn’t for the full amount, click the Rolling Deduction tab, select the option and in Total Amount enter the total amount that need to be recovered
8. Click OK, then Save the Payee record

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