How to Add Payroll Deductions

How to Add Payroll Deductions

The Pay Deductions desktop is where deductions to be withheld from paychecks are configured in OnTarget.  These configurations ultimately control the miscellaneous deductions for employees, taxation (if any), method of calculation, and applicable employment statuses. 


In order to add a pay deduction, click on Add Pay Deduction.  This opens the pay deduction configuration window. 





First, enter a description.  This should be a description that is consistent with the type of pay deduction.  For instance, if this pay deduction is for Child Support, enter “Child Support”.   





Next, select the G/L Account that the pay deduction should be associated with.  Accounts are setup by going to Configure, List Configuration, Global, and Chart of Accounts.  This assignment is integral to the General Ledger.  Every time paychecks are cut, the deductions withheld from the checks will post to the GL based on this link.


The next field is “Start Delay Days”.  This is where the number of days (if any) is specified from either an employee’s date of hire or a specified effective date before the pay deduction becomes active.  Use Start Delay with Effective Date is controlled under List Configuration, Payroll, and Rules.  So for example, if you did not want a Group Health deduction to become active until 90 days from either the date of hire or a specified effective date, you would simply enter “90” in the data field.       


The next section is “Tax Subject To”.  If a particular pay deduction is subject to any of the tax types listed, place a check in the corresponding checkbox.  For a post-tax deduction all boxes would typically be checked.






Calculation Method is where the type of calculation to be performed is specified (either by percent or by amount).  For example, if an employee elects to have 3% withheld for 401k.  Here, a pay deduction can be marked as a Group Health Insurance type by checking the Group Health Insurance checkbox.  Corresponding employer contribution types of percent or amount are selectable as well. 





Finally, under the Applicable Employees section, specify the applicable employment status or statuses that this particular pay deduction applies to.  This deduction will then only be visible at employee records with the selected statuses.






If the Pay Deductions search grid is not visible, click on “Search Pay Deductions” to populate the grid.  Click the Search button to display any pay deductions currently added to OnTarget.  Search results can be filtered by description and GL account number.





This next section will walk through the process of adding the deduction to the employee record.  First, ensure that all roles that need access to the employee Miscellaneous Deductions tab have it.  Click on Configure, Security, Configure Roles, Select the role that needs access, Desktop Security, Expand Employees, Misc Deductions checkbox, and Save.





Navigate to an employee record to which you want to add a miscellaneous deduction.  Click on the Misc. Deductions tab.  Click “Add” to start adding a miscellaneous deduction.   





Select the description from the drop-down.  If the payroll rules are set to follow effective date (and an effective date is applicable), enter it here.  If the start delay days differs from the default pay deduction definition, enter that here. 


The “Type” for the deduction auto-populates based on the configuration settings…“A” for amount or “P” for percentage. 





The Amount field allows for the entry of a dollar amount (when the type is an amount) and a percentage (when the type is a percentage).  This specifies the amount to be deducted from the check.  The next two fields, Employer Type and Employer Amount, are used to specify any employer contributions (if applicable) per deduction. 



A hard dollar limit can also be set per pay deduction.  The “Date Last Taken” field will auto-update based on most recent payroll processing.  A maximum deduction percentage or amount can be specified in the next 2 fields. 





Finally, to inactivate a particular pay deduction, check the “Inactive” checkbox.  Delete is available for any pay deductions that have never been used for a particular employee.  Click "Update" to save the miscellaneous deduction to the employee record.  



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