Payroll Deduction Management

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Posted on by David Callery

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The situation is that the company would like to insure that the employee receives a reasonable amount of money in the Net Pay. The employees share in the tax sheltered healthcare cost and though they make good money, their pay can fluctuate so the company allows the employees to carry arrearages.

The deduction "management" rules seems to only apply to Garnishments as to an amount that can be deducted. It is difficult to edit pre-tax deductions in the Review/Edit Check after calculation due to the changes for reportable earnings for all Fed, State, FICA, FUTA, and SUTA and then the recalculation of those taxes. It is equally as cumbersome to calculate, recognize an issue, uncalculate, remanage the deductions, and recalculate.

Is there an easier process or workflow that would handle the issue?

Thanks,

Dave

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Carolyn Kolpien on at

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Re: Payroll Deduction Management

Dave,

Method 3 in KB 846654 would have worked except that your deduction is pre-tax so you wouldn’t be able to base it on disposable earnings.

Maybe you could setup the deduction as a percentage of gross earnings and set a max deduction amount equal to what the deduction should normally be. For example:

Say their “normal” gross wages are $1000

Say their health contribution is $100

Set the deduction to be 10% of gross to a max of $100.

If they are only paid $100 in a given week, their contribution would only be $10 instead of the normal $100.

If they are paid $1500 in a given week, their contribution would max out at the regular $100.

The downside to this is you would have to manually track the arrearages, but that may be easier than doing all the manual calculation/editing.

Let me know how this sounds.