Creating deduction codes

  1. Sign in as Administrator.
  2. Select Setup > Payroll > Deduction Structure.
  3. Select the Deduction Codes tab.
  4. Click Create.
  5. In the Deduction Code field, specify an alphanumeric name for the deduction code.
  6. Optionally, specify a description.
  7. Specify a Deduction Type.
    Benefit
    Used to track employee and company contributions to benefit plans on a pay period basis.
    Loan
    Used to track deductions to employee pay for loanable gratuity pay.
    Garnishment
    Used to track garnishment amounts deducted from employee pay.
    Tax
    Used to track income tax deductions made to employee pay.
    Other

    Used for multiple deductions created for the same employee. Original deductions with open-end dates allow a new deduction with a start date later than the original deduction start date. This automatically ends the original deduction.

    The end date for the original deduction is automatically added with the day before the begin date of new deduction.

    A new deduction cannot have a date range, beginning date, or end date within an existing deduction's date range, and vice versa.

  8. Specify a begin date and, optionally, specify an end date.
  9. Specify a country.
  10. In the Adjust Pay field, specify what party is responsible for the cost of a deduction code that is assigned to an employee:

    • Employee Paid: The deduction is paid by the employee.

    • Employer Paid: The deduction is paid by the company.

    • Add To Net: The amount is added to net pay. It can be used to reimburse employees for expenses or to apply earned income credits.

  11. Specify a calculation type, amount or percent, and eligibility group.
  12. Specify a payment description and deduction payment group.
  13. On the Processing Rules form, select a value for this field:
    Arrears
    This field is used to determine the outcome if there is not enough net pay to take the full deduction amount on a payment.
    • If you select a value that includes Net to Zero, then as much of the deduction as possible is taken until the net pay equals zero.
    • If you select a value that includes Create Arrears, then arrears deductions are created to be taken on a future payment.
    • If you select a value that includes No Arrears, then no arrears deductions are created.
    • If no value is specified, then the value that is defined on the deduction code is used.
  14. Specify values for other relevant fields on the Processing Rules form.
  15. If you specified a deduction type of Tax, then specify a value for these fields on the Tax form:
    • Tax Authority
    • Additional Tax Code
    • Self Adjust Tax
    • Tax Provider Formula Number
    • Reciprocal Formula
    • Wage Indicator
  16. If you specified a deduction type of Garnishment, then specify a value for any relevant fields on the Garnishments form.
  17. Click Save.
  18. If you specified a tax category of Payroll Expense Tax, then specify a value for these fields on the Estimated Gross Wages form:
    • Legal Entity
    • Estimated Quarterly Wage (USD)
    • Estimated Annual Wage (USD)
  19. Click Save.