How to Create a New Deduction Header

Apply Order

Order in which deductions linked to the deduction header 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.

Active

When ticked, the deduction header is active and can therefore be linked to new deductions that are configured at the payee level. When un-ticked, the deduction header cannot be linked to any new deductions configured at the payee level.

Show On Payslip

If ticked, deductions linked to the deduction header will be itemised on a payee's payslip if the applicable payslip format is configured to display deductions.

Deduct From

Select if the deduction is a gross or net deduction.

Allow to override the deduct from on payee

When ticked, this will allow the Deduct From to be changed against the deduction header applied to individual payees.

Import Code

Unique code that maps the deduction header to a corresponding deduction header in a third-party finance system, where the deduction header is imported from the third-party system.

Export Code

Unique code that maps the deduction header to a corresponding deduction header in a third-party finance system, where the deduction header is exported to the third-party system.

B/S Export Account

Where the system is integrated with a third-party financial system, this defines the balance sheet account number in the financial system to which transactions against the deduction header will be mapped.

Apply Bank Details on Payee Deduction

If ticked, indicates that each payee deduction that is linked to the deduction header is paid into a different bank account. When this field is ticked, all other fields within the Banking Details section are unavailable because the banak account details are defined on the individual payee deductions that are linked to the deduction header as opposed to the deduction header itself.

If unticked, indicates that all payee deductions that are linked to the deduction header are paid into the same bank account. Where that is the case, it is necessary to define the bank account details in the remainder of the fields within the Banking Details section (for more information, see below).

Company Name

Name of the organisation to which the deductions linked to the deduction header are paid. For example: Builders Workers Union; NEST Pension Provider.

AU / NZ Payroll - BSB

Bank/state/branch number or the that identifies the bank and branch where the account, to which deductions linked to the deduction header are paid, is held. This field is available only if the EFT Payment option is enabled.

AU / NZ Payroll - Branch

Displays the bank abbreviation and branch name that matches the BSB number keyed in the BSB field. If a matching branch cannot be found, the text Branch Not Found is displayed instead. If this is the case, check that the BSB number you have keyed in is correct and key in the number again if necessary. Note that you can still save the deduction header even if the matching bank branch cannot be found in the system.

NZ Payroll - NCC

National clearing code number or the that identifies the bank and branch where the account, to which deductions linked to the deduction header are paid, is held.  This field is available only if the EFT Payment option is enabled.

UK Payroll - Sort Code

Enter the sort code of the receiving bank, to which deductions linked to the deduction header are paid, is held. 

Account Reference

Payment reference used to identify the source of the deduction payment. This is a generic payment reference and is only used where no payee account reference is defined on the payee deduction that is linked to this deduction header. If a payee account reference is defined on the payee deduction, the account reference defined in this field is ignored.

Account Name

Name of the account into which deductions linked to the deduction header are paid.

Account Number

Account number of the account into which deductions linked to the deduction header are paid.

If payee deductions linked to this deduction header will not be paid by EFT, click EFT / BACS Payment to clear the tick.

Closed Deduction Applied to Adjustments

This option allows any expired deduction on a payee record, which is linked to the deduction header, to be included in an adjustment pay batch if the expired deduction was valid during the period being adjusted.

For example, where an adjustment to a payee's earnings for a prior period affects the amount that should have been deducted from the payee's earnings for that period, such as where the deduction amount was based on a percentage of gross or net earnings, this option allows the deduction amount to be adjusted accordingly even if the deduction is no longer applicable.

GST / VAT

This option allows Goods and Services Tax, or an equivalent value-added tax, to be applied to deductions linked to the deduction header if a deduction is provided as a service to company (incorporated/independent) contractors.

AU Payroll - RESC

This option is available only if the deduction type of the deduction header is set to Payee Super. If this option is enabled the RESC flag will be enabled by default on all payee deductions that are linked to the deduction header to indicate that the deductions represent Reportable Employer Superannuation Contributions that are in excess of the legislated Superannuation Guarantee (SG) contribution amount. Such deductions will be classed as RESC superannuation contributions for the purposes of remitting superannuation contributions to superannuation funds and on payment summaries.

This option should be enabled if the payee deductions that will be linked to the deduction header will be salary sacrifice superannuation deductions rather than deductions that contribute towards the SG amount. However, the RESC flag can be overridden on individual payee deductions that are linked to the deduction header.

AU Payroll - Reduce Superable Salary

If this option is enabled, any amounts deducted as a result of payee deductions linked to the deduction header will reduce the earnings amount based on which the superannuation guarantee (SG) amount will be calculated.

For example, where a payee has a salary sacrifice arrangement their employer can legally contribute SG superannuation contributions based on the payee's reduced earnings after gross deductions rather than the entire gross earnings amount. In such cases, the salary sacrifice deductions can be linked to a deduction header that is configured to reduce the payee's superable salary.

AU Payroll - Child Support Protected Earnings

This field grouping defines the type of net earnings protection that applies to payees whose earnings are subject to child support deductions. Net earnings protection ensures that a deduction is not taken from a payee's earnings if doing so would result in the payee's remaining net earnings for a pay period being less than a certain percentage of their overall net earnings for the pay period or if the remaining net earnings would be less than a certain fixed amount.
This field grouping is available only in v11.34 onwards and is enabled only if the deduction type of the deduction header is set to Child Support, in which case it is mandatory to select options in the fields in this field grouping. The fields in this field grouping are described below:

1. Protected Rate Type

Determines if net earnings protection is based on a percentage of earnings per pay period or a fixed amount per pay period. Select Percent if a certain percentage of payees' net earnings are to be protected. Otherwise, select Fixed if a fixed amount of net earnings are to be protected.

2. Protected Rate Value

Defines the percentage or fixed amount of net earnings that are to be protected.

UK Payroll - Protected Earnings Arrears Action; Protected Earnings Net Deduction; Trigger Deduction; Deduct Student Loan

Click here for details on configuring these items which will display for particular Deduction Types that require an Attachment of Earnings Order.

Default Rate

If ticked, this deduction header defines a default deduction rate and therefore the rate of deduction is defined by the deduction header instead of being defined separately on each payee deduction that is linked to this deduction header. The default deduction rate define by the deduction header cannot be overridden on individual payee deductions.

If un-ticked, the deduction rate must be defined on each payee deduction that is linked to this deduction header.

This field grouping is available only in v11.34 onwards and if this option is ticked, it is mandatory to select options in the fields in this field grouping.

The fields in this field grouping are described below.

1. Rate Type

Determines if the deduction is deducted based on a percentage of earnings per pay period or if a fixed amount is to be deducted per pay period.

2. Calculate On

Determines if the deduction should be calculated on Gross or Net.

3. Rate Value

Determines the percentage of earnings or the fixed amount to be deducted per pay period.

4. Pay Code Group

This defines the pay code values in the pay batch on which the deduction percentage should be calculated on. This is only applicable if the Calculate On is set to Gross.

NZ Payroll - Payroll Giving Tax Credit

If this option is enabled, the system will identify that any deductions linked to the deduction header are eligible for a tax credit.

For example, your organisation may offer payees the option to donate money to a charitable organisation via direct deductions from their earnings under the payroll giving scheme. If a payee makes such donations they will be eligible for tax credits, which are calculated at the Tax Stage of a pay batch. Enabling this flag indicates that tax credits will be calculated and applied to any deductions that are linked to the deduction header and therefore, where a payee has such deductions in a pay batch, the system can calculate the tax credits appropriately based on the deduction amounts.

AU NZ Payroll - Deductible Service Fee

If a payee deduction is linked to a deduction header that is flagged in this way, any payee deductions of the corresponding type that are deducted from a payee’s earnings during a pay period will be itemised on a Deductible Service Fee Invoice. Such an invoice can be used to invoice a payee for services that have been provided, such as the provision of public liability insurance, for which the payee has paid through deductions form their earnings.