Ways in which benefit plans use deductions

The Benefits Administration application uses deductions to:

  • track employee and company contributions on a pay period basis

  • determine to which general ledger accounts the plan's cost should be posted

    Note: If you want transactions for particular employees posted to different general ledger accounts, then you can override (by employee group) the general ledger accounts that are defined on deductions.

    See Overriding General Ledger Accounts.

You assign deductions to benefit plans; each deduction can be assigned to only one benefit plan.

This list explains the use of each type of deduction. You can define each type of deduction as an amount or a percent. The deductions that you use for a plan depends on the contribution type that you select for a plan and how you define the contribution.

This list describes the deductions:

Deduction types Description
Pretax Tracks employee pretax contributions.
After limit

Tracks employee after-tax contributions for 401(k) and 403(b) plans when the employee has met the pretax limit.

If the Use AT Limit Deductions field in the Options tab of HR00.1 (Company) is No, then after limit deductions are not valid; the application continues to use pretax deductions on an after-tax basis.
After-tax Tracks employee after-tax contributions.
Company Tracks the company contribution when the company contribution is not a match of the employee contribution.
Company Match Pretax Tracks the company contribution calculated as a match of the employee pretax deduction.
Company Match After-limit Tracks the company contribution calculated as a match of the employee after-limit deduction.
Company Match After-tax Tracks the company contribution calculated as a match of the employee after-tax deduction.
Flex company (for flex plans only) Tracks the company's cost when an employee uses flex dollars to pay for a benefit.