Defining US and CA garnishment deduction codes

Employee garnishments are court-ordered or creditor deductions from an employee's pay.

Note: Garnishment deduction codes are one element in garnishment setup. To deduct garnishments from employee pay you must also setup garnishments and assign garnishments to employees.

See Setting up garnishments and Employee: garnishments.

  1. Access Deduction (PR05.1).
  2. Define deduction code and description. Use these guidelines to specify the field values:
    Deduction

    The code that represents the deduction.

    (Description)

    The description of the deduction.

    Payment Description

    The description of this deduction that prints on payments.

    Note: If you assign a deduction class to this deduction code, then the payment description on the deduction class overrides this payment description.
  3. Select how you want Payroll to calculate the deduction in the Calculation Type field.
    If the deduction is a Select
    Percent of employee gross pay Percent.
    Flat amount to be deducted Flat Amount.
    Percent of employee disposable wages (U.S.) or net wages (Canada) Percent of Disposable/Net Wages.
    Percent of employee disposable wages (U.S.) or net wages (Canada) plus a minimum flat amount. Percent of Disposable/Net Wages with Minimum Flat Amount.
    Percent of available wages (Canada) Percent of Available Wages.
  4. Define pay information. Use these guidelines to specify the field values:
    Pay Class

    Determines if you want the application to calculate the deduction on pay associated with a specific pay class.

    Amount or Percent

    Specify an amount or percent. The type that you select in the Calculation Type field determines if the system considers the value that you type an amount or a percent.

    Currency

    Determines the currency that you want Payroll to use to calculate the deduction.

    If the company uses one currency, then the company currency is set as default to this field.

    If the company uses multiple currencies, then the process level currency is set as default to this field.

    Note: The employee currency and deduction currency must match, to assign the deduction to the employee.
    Note: The calculation type that you assign to this deduction determines if the Amount or Percent field is an amount or a percent.
  5. Specify the percent or flat amount that you want to deduct in the Amount or Percent field.
    Note: Typically, the amount or percent is defined at the employee level. If you define the amount or percent on the deduction, then all employees with this deduction have the same amount or percent deducted.
  6. If you selected Flat Amount plus a Percent of Gross Pay or Percent of Disposable/Net Wages with Minimum Flat Amount in the Calculation type field, then specify the additional percent or minimum amount in the Addl or Minimum Amt, Pct field.
  7. Select Employee Paid in the Adjust Pay field.
  8. If you want to include this deduction in a deduction class, then select the deduction class in the Deduction Class field.
    Note: You can override the value in these fields for individual employees when you assign the garnishment to employees.
  9. Define deduction processing options. Use these guidelines to specify the field values:
    Priority

    The number that represents the order in which Payroll takes the deduction within the category of other deductions.

    Arrears

    Select what you want Payroll to do if there is not enough employee pay to cover the deduction.

    Note: It is recommended that you use Net to Zero (No Arrears).
    Cycles

    Select the deduction cycles in which Payroll takes the deduction.

  10. Select Yes in the Garnishment field.
    Note: When you calculate earnings and deductions, Payroll verifies the effective date to determine whether or not to take the deduction.
  11. Specify the beginning date or the date range that the deduction is in effect in the Effective Date fields. This date or date range can be overridden on the employee garnishment.
  12. Select the deduction accrual account in the Accrual Account field.
  13. Define deduction limits. Use these guidelines to specify the field values:
    Monthly Limit

    The maximum amount Payroll can deduct for this deduction in one month.

    Payment Limit

    The maximum amount Payroll can deduct for this deduction in one payment.

    Note: Leave the Vendor field blank and define the vendor on U.S. Employee Garnishment (PR26.1) or Canada Employee Garnishment (PR47.1).

    See Employee: garnishments.

  14. If you use the Accounts Payable application, then you must define AP options. Use these guidelines to specify the field values:
    Update Accounts Payable

    Select whether or not to create invoices for payroll-related payables when you close Payroll.

    Create Invoice by Employee

    Select whether or not to create AP invoices by employee.

    See the Accounts Payable User Guide.

Related reports and inquiries

To Use
List deductions Deduction Listing (PR205)
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