Required deduction
Required deductions are deductions that Payroll automatically assigns to the employees you enter into the Human Resources application. Using required deductions reduces the number of deductions that you need to manually assign to employees.
There are two elements that make up a required deduction:
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Deduction Code—the deduction you want to be required.
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Deduction Required Code—a code that defines the criteria employees must meet to have the deduction automatically assigned to them. You assign this code to the deduction code to make the deduction required.
Employees are only assigned the required deductions for which they meet the criteria defined in Payroll.
You can update required deductions for an individual in the Human Resources and Payroll applications or you can update required deductions for a group in Payroll.
Tax deductions and required deduction codes
Using deduction required codes eliminates the need to manually assign each employee to tax deductions. Employee: taxes
The BSI tax engine has a TaxLocator™ feature that automatically updates tax deductions for U.S. employees. The TaxLocator can be set to Federal only, Federal and State only or Locate All.How Do I View and Modify Employee Tax Deductions?
Example
Two Rivers Company wanted to automatically assign all Canada employees in the company to Employment Insurance and Canada Pension Plan deductions (both employee-paid and company-paid). Two Rivers also wanted to automatically assign workers' compensation deductions to all U.S. employees.
Two Rivers Company defined the following deduction required codes to meet their needs:
| Deduction Required Code | Required Criteria on Employee Record | Deduction Code |
|---|---|---|
| CAN | Work country = Canada | CPPR, CPPE, EIEE, EIER |
| US | Work Country = U.S. | WCUS |