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Set Up Wage Type Classes and Attach Limits

In this step you:

Wage type classes

Limits on deductions can only be applied to wage type classes. Each wage type class contains one or more wage types which should be linked for the purposes of deductions and must be processed as a group. Typical wage type classes could be a group of all insurance wage types, for instance.

You may assign one of three different reduction rules to the wage type classes. The reduction rule assigned is then used by the system when a limit is reached by a deduction.

It is also possible to prioritize wage types within a wage type class.

Additionally you can define the arrears characteristic of a wage type. If a deduction needs to be reduced this amount can be forwardeded to the next period using the arrears functionality.

Limits

A limit consists of either a rule or a fixed amount which may be deducted by the wage types within a wage type class.

Assigment of limits to wage type classes

You may assign a number of limits to a wage type class. They may be valid for different as well as overlapping periods.

This means that you could limit insurance deductions, for instance, to 5% of the total gross amount an employee receives, but to no more than $150 dollars per limit interval.

Activities

Wage type classes

1. Define wage type classes and enter the reduction rule to be used for each on the Change view "Assignment of Wage Type Classes": Overview screen.
2. Select a wage type class and choose Wage type classification in the navigation area of the screen.
3. Enter the deduction wage types within the relevant wage type classes
Please note, for wage type class with reduction rule 1, (according to wage type priorities) you should enter the individual priorities at this stage.
4. Enter the arrears characteristic of the wage type.

Limits

1. Select a wage type class and choose Wage type class limits in the navigation area of the screen.
2. Enter the time period for which the limit is valid.
3. Set the payroll modifier, wage type class and sequential number of the limit.
4. Enter the interval to which the limit should apply.
5. Enter either the rule or a fixed amount to limit the deduction.