Deductions

This screen is used to define any standard deductions from the employee's pay, including any manual or additional tax contributions.
Ready Pay has several additional functions which can be applied to deductions, for example a reducing balance or start and finish dates.

To Enter a New Deduction:

  1. Once the employee file is open, select Deductions on the left.
  2. Click anywhere in the screen on the right to create a new line.
    If there is a deduction already in the screen, click in the last deduction's HrsUnit field and press the down arrow on the keyboard.
    Both options create a blank deduction entry line.
  3. Complete the fields below as necessary:

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Field Explanation Wizard
PayItems Select the required deduction type from the drop-down list. Step 8 of the Employee Creation Wizard - "Deductions"
Hrs/Unit Enter the number of hours or units to be deducted.
Uom The system will display the unit of measurement from the Pay Item file.
Rate Enter the dollar rate to be deducted for each unit.
NPR This is 'Net Pay Rounding'. Tick this option if the employee wants to donate the cents from their net pay to the current Deduction Pay Item - which would generally be a charity. These deduction amounts can be transferred to the charity each month (via Electronic Banking).
  • NPR can be applied to an existing Deduction Pay Item, however this will zero any pre-existing deduction amount. Therefore you may need to apply this to a new Deduction Pay Item for the recipient charity.
  • Only 'after tax' deductions can be flagged as an NPR deduction
  • Each employee can only have one deduction flagged as NPR in their Deduction screen.
  • An NPR deduction cannot have a ‘Protected Earnings’ amount on the same deduction line.
Factor The factor is a multiplication which is applied to the pay item to calculate any weighting. Generally Deductions will always have a factor of 1.
The factor is not entered here - it is entered in Payroll Framework | Pay Items | Deduction Pay Items.
Amount This will be calculated automatically when you click Apply to save.
Commenced The deduction will be withheld from the employee's pay starting on the first payrun where the period ending date is later than the commencement date.
If no date is entered, the deduction will be effective from the next payrun.
Final date The deduction will be withheld from the employee's pay until the first payrun where the period ending date is later than the final date.
If no final date is entered, the deduction will remain in effect until manually deleted from the employee's master file.
Balance A reducing balance can be entered so that the deduction only remains in effect while there is an outstanding balance.
It might be used for a loan repayment or purchase of uniform.
With each payrun, the balance is automatically reduced by the amount until it reaches $0.
The final deduction will be automatically adjusted if the remaining balance is less than the specified amount.
LodgeRef Enter a lodgement reference which will uniquely identify this employee when the transaction is posted to the bank.
A separate entry will appear in the electronic remittance file for each deduction with a unique lodgement reference.
Protected Earns

Protected Earnings Amount (PEA) is used to guarantee a minimum net pay, where a garnished wage has been ordered by a court, child support agency or other government body.
In the process of deducting a garnishee amount, if the employee's net pay falls below the PEA, the garnishee amount will be reduced so that the employee receives the PEA.

 

Notes about Deductions:

  • When an employee has more than one deduction, any deduction with a protected earnings amount specified must be at the top of the list. Use the blue Up or Down buttons to move the deductions if required. 
  • The protected earnings amount must be placed only on the deduction which you wish to reduce.
  • Because they reduce net pay, protected earnings can only be applied to deductions after tax.