Creating deduction codes

  1. As payroll administrators, select Payroll > Administration > Setup.

    For administrators, see the information about creating deduction codes in Infor HR Talent Setup and Administration Guide.

  2. In the Structure pane, click Deductions.
  3. Click the Deduction Codes tab.
  4. Click Create.
  5. Specify the header of the deduction code to create. Specify this information:
    Deduction Code
    Specify an alphanumeric name of the deduction code. Optionally, specify a description of the deduction code.
    Deduction Type
    Select a deduction type of the deduction code:
    • Benefit: This deduction type is used to track employee and company contributions to benefit plans on a pay period basis.
    • Loan: This deduction type is used to track deductions to employee pay for loanable gratuity pay.
    • Garnishment: This deduction type is used to track garnishment amounts deducted from employee pay.
    • Tax: This deduction type is used to track income tax deductions made to employee pay
    • Other: This deduction type is used for multiple deductions created for the same employee.

      If the original deductions are with open end dates, then you can create a new deduction with a start date later than the original deduction start date. The original deduction is ended automatically.

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

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

    Begin Date
    Specify a begin date of the deduction code.
    End Date
    Optionally, specify an end date of the deduction code.
    Active
    Select this check box if the begin date and end date of the deduction code is active.
    Country/Jurisdiction
    Specify a country of the deduction code.
  6. On the Detail tab, specify this information:
    Adjust Pay
    Select which 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 and is used to reimburse employees for expenses or to apply earned income credits.
    • Tax Credit: This value is required when creating the Deduction Code for Tax Category = 7 Employee Employment Income Deduction used in Canadian payroll processing. The tax calculation for the Canadian Income Deduction at Source requires a deduction set up with Tax Credit and Tax Category = 7 Employee Employment Income Deduction. This value should be assigned to all employees with the Income Deduction at Source.
    Calculation Type
    Select a calculation type of the deduction code.

    To calculate the deduction code that you link to a custom compute, select Custom Calculation. This option is available if you create a custom compute with an EmployeeDeduction business class and HCMComputeDeductionCode subject.

    See Creating custom computes and Adding a subject to custom computes.

    Amount
    Specify an amount to process the deduction code for a specific amount of the employee's income.
    Currency
    Specify which currency to process the deduction code.
    Percent
    Specify a percentage to process the deduction code for a percent of the employee's income.
    Tax Provider Code
    Select the country's tax provider code.
    • For US processing, select the code for Other and Benefit deduction types.
    • For Canada processing, select the code for Other, Benefit, and Garnishment deduction types.
    Quebec Cooperative Investment Plan Percent
    Specify the applicable percent of the amount withheld for the acquisition of shares for employees participating in the co-operative investment plan.

    This field is applicable for tax provider codes of Quebec Cooperative Investment Plans.

    Custom Compute
    Select a custom compute to link with the deduction code.
    Exclude from Garnishment Disposable Income
    Select this check box to exclude the deduction code from the calculation of disposable income in the garnishment rule.
    Print Indicator
    Select this check box to print the payment description and deduction payment group of the deduction code.
    Payment Description
    Specify a payment description of the deduction code.
    Deduction Payment Group
    Specify a deduction payment group of the deduction code.
    Apply Contribution Annual Limits
    Select this check box to ensure that the deduction amounts and their corresponding year-to-date totals are accumulated and counted based on the specified Contribution Annual Limit for the employee’s respective age tier.
  7. On the Processing Rules tab, specify this information:
    Process Rule

    Specify whether the system prevents a deduction from being taken more than once for the same pay period.

    • Not Assigned: The system does not perform additional pay period validation.
    • Process Once Per Pay Period: If a deduction qualifies during Calculate Payments, the system checks whether the deduction was previously taken for the same pay period.

      The system evaluates closed employee payments, finalized manual payments, and reversals and partial voids.

      The system uses the employee payment Pay Period End date to determine the pay period. If the deduction was previously taken for the same pay period, the system suppresses the deduction.

      This option evaluates historical payment records. The system does not evaluate employee payments that are being created during the current Calculate Payments run.

    • Process Once Per Pay Period Including Current Cycle Check Groups: If a deduction qualifies during Calculate Payments, the system checks whether the deduction was previously taken for the same pay period.

      The system evaluates: closed employee payments, finalized manual payments, reversals and partial voids, and employee payments that are being created during the current payroll cycle.

      The system uses the employee payment Pay Period End date to determine the pay period. If the deduction was previously taken for the same pay period, the system suppresses the deduction.

      When employee time records are separated into multiple employee payments by using Check Group, the system evaluates employee payments that are created during the current Calculate Payments run. This validation prevents the deduction from being taken multiple times for the same pay period when separate employee payments are generated for the pay period within the same payroll cycle.

    The Process Rule does not determine deduction eligibility. The system determines deduction eligibility by the deduction cycle and the payment date in the Calculate Payments run.

    The Process Rule adds a validation that can suppress a deduction after the deduction qualifies. The system uses the employee payment Pay Period End date to determine whether a deduction already exists for a pay period.

    The Process Once Per Pay Period option evaluates only previously processed payments. While the Process Once Per Pay Period Including Current Cycle Check Groups option evaluates both previously processed payments and employee payments that are created during the current payroll cycle. This validation prevents duplicate deductions across employee payments that are created from different check groups for the same pay period.

    Pay Class
    Specify a pay class to associate the deduction code with the process rule.
    Monthly Limit
    Specify a monthly limit to the deduction code.
    Payment Limit
    Specify a payment limit to the deduction code.
    Worker Compensation Rate Table
    Select this check box to set up the workers compensation rate to the deduction code.
    Priority
    Specify a number to indicate the priority for the process rule.
    Cycle 1 to Cycle 9
    Optionally, select whether to Take Deduction or Update Taxable Only to the deduction codes.
    Arrears
    Select 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 you leave this field blank, then the value that is defined on the deduction code is used.
    Process Arrears
    Optionally, select this check box to process arrears of the deduction code.
    Maximum Arrears To Process
    Optionally, specify the maximum number of arrears to process per pay cycle.
  8. If you select the Tax deduction type, then on the Tax tab, specify a value for any relevant fields.
    For Canada payroll, to create an employee deduction with the claim code of Basic Personal Amount, select the Use Basic Personal Exemption For Claim Code check box. Clear this check box to create an employee deduction with the claim code of Engage BSI Claim Code Look Up.
  9. If you select a Garnishment deduction type, then on the Garnishments tab, specify a value for any relevant fields.
  10. Click Save.
  11. If you select a Garnishment deduction type, on the Finance tab, select a Create Invoice By Employee option:
    • No: Select this option if invoice should not be created per Employee.
    • Per Employee Payment Deduction Detail: Select this option to create separate invoices per Employee and unique Employee Payment Deduction Detail.

      When you select Per Employee Payment Deduction Detail, the Close Payroll process creates different invoices for each Employee and unique Organization Unit or Legal Entity.

    • Per Employee Payment: Select this option to consolidate distributions from the same garnishment into one invoice.

      When you select Per Employee Payment, the Close Payroll process combines multiple distributions for the same employee and garnishment into a single Payroll Distribution record. The system then produces a single consolidated AP invoice during Post Payroll.

  12. Click Save.
  13. If you specified a Payroll Expense Tax tax category, then on the Estimated Gross Wages tab, specify a value for these fields.
    • Legal Entity
    • Estimated Quarterly Wage (USD)
    • Estimated Annual Wage (USD)
  14. Click Save.