All Standard Deduction Pay Elements built-in to iPayroll
iPayroll has built-in a number of standard Deduction Pay Elements that are maintained by iPayroll for you to use. This greatly simplifies the work you have to do to set up and maintain your payroll, as we continually update these Pay Elements to reflect changing regulations and requirements.
Add a new Deduction Pay Element to your iPayroll Organisation
You can set up your own special Deductions to supplement the many standard deductions that are set and maintained for you by iPayroll. Your own special deductions allow you to easily calculate and deduct any unique deductions that are used within your organisation.
Tip: Before setting up your own deduction, please check that no standard deductions already do what you need.
Adding a new Deduction
To set up a special deduction follow these steps:
1. Go to 'Setup' then 'Pay Elements' then submenu 'Deductions' to add a new Deduction Pay Element.
2. Press the '+Add' Deduction button.
3. Enter a Deduction Code and Description.
4. Complete the information on the Deduction form and press the 'Save this Deduction' button.
Fields to complete when adding a new Deduction
Each Deduction contains a number of pieces of information that control how the deduction is calculated and paid.
Basic Details
Deduction Code - Enter a code that can be easily identified. You should use a short, easy to type, code that you can remember easily.
Description - Enter a description that will clearly describe to a person what this deduction is for. This is displayed on peoples timesheet’s and payslips.
Calculation Rule - Select the appropriate type from the list. This is the main way to determine how a deduction is calculated.
Rate Amount - This entry depends on the Rate Type selected (above).
Tip: To override the percentage on individual people, enter the Rate Amount as 1.0 and then enter the actual percentage for each person into the Quantity when adding a transaction on a timesheet.
Priority - Leave this blank, and an appropriate priority will be generated for you. (You will only rarely have to change the default priority).
The priority determines the order in which deductions are calculated, paid and displayed on timesheet’s and payslips. This order is quite important for standard deductions - for example tax must be deducted at the appropriate point and a remaining pay deduction must be made right the the end. Fortunately, the order of your special deductions is not too important and you will often just accept the default priority.
If you are concerned about the order that deductions are made, review the priority numbers on your deduction page and change them as required. Priorities are significant when a person doesn't have enough pay to make all their deductions, ones with smaller priority numbers will be made first.
Payment Details
Payment Method - Select an option to determine how the actual money for this deduction is paid.
Bank Details - Enter the Bank Account, Payee Particulars, Payee Code and Payee Reference required for this deduction. (Obviously this is only required where the Payment Method is Bank). This information will be available from the organisation you are making this deduction for.
Costing Details
Note: This is only displayed if you have the costing features turned on. Select how this deduction is to be costed. You have four options:-
Deduction Type
Select the one that best describes this deduction:
Allow Partial Deduction - Tick this box if part of the amount should be deducted, even if the person doesn't have enough remaining pay to make the entire deduction. (Note: Always tick this for a reducing balance deduction, otherwise the final deduction made to clear the balance may not be made).
Reducing Balance Deduction - Tick this box to make this deduction a Reducing Balance deduction.
These deductions require that you enter a Balance when setting up the deduction. The deduction will be made as usual, and the balance will reduce. When the balance reaches zero, the deduction will automatically stop. (Read the Tax Arrears help for an example of a reducing balance deduction).