Creating deduction codes

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

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.

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.

Process Rule

Select a process rule of the deduction code.

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.

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.

• Legal Entity
• Estimated Quarterly Wage (USD)
• Estimated Annual Wage (USD)