Deductions 

Purpose

This component calculates all payments to third-parties with the exception of taxes and garnishments, which are deducted directly from the employee’s pay. Maximum thresholds for deductions and outstanding payments are taken into account.

Features

Types of Deductions

Within payroll, deductions can refer to gross remuneration or to net remuneration. The following types of deductions are differentiated between:

·        Statutory deductions

Statutory deductions include taxes or social insurance payments, for example.

·        Voluntary deductions

Voluntary deductions include payments to a savings plan or a voluntary insurance policy that the employer takes out for the employees.

The deductions can also be differentiated between as follows:

·        Once-Only Deductions, for example, a donation

·        Recurring Deductions, for example, for an imputed income or a savings plan

Processing Deductions

The system offers you various ways to process different types of deductions.

·        You can create, administer, and settle various types of company loans. The component Loans is available for this.

·        You can use Arrears Processing to determine how the payroll run should continue if the deductions exceed the net remuneration in a period.

·        You can use Limits on Deductions to define maximum limits on deductions. This function is only possible in the country versions for USA, Canada, Hong Kong, and Singapore.

·        You can create and process deductions that have to be taken in equal amounts over several periods using Balances & Totals.

·        You can use Prepaid Deductions to pay off deductions from a previously created deduction account over several periods. This function is only available in the USA and Canada country versions.