Once a deduction has been set up you are able to update these deductions by going into the Employee tab on the dashboard and clicking on the employee's name from the list or doing a search for them in the search box.
Once you have chosen the employee from the list, you need to click on the 'Pay Run Inclusions' option under 'Pay Run Settings' on the left hand side of the screen
Choose which deduction you would like to update and click on the name. This will open up the deduction in detail and allow you to make any adjustments:
- Select the appropriate deduction category from the drop down list.
- Enter the deduction amount to be applied per pay run. It can be a Fixed amount, Percentage of Gross, Percentage of Student Loan or Percentage of Net (this setting only applies for post tax deductions).
- Select whether the deduction should be paid manually, to a bank account or to the IRD.
- If in Step 4, you have chosen a bank account, ensure you then select the relevant bank account.
- Select whether you want to apply preserved earnings to this deduction. Refer below on detailed information relating to preserved earnings.
- Enter Payment Reference (if chosen for a deduction to be paid to a bank account). This reference will appear on the employee's pay slip but also the recipient's bank statement. (Handy for deductions such as child support, etc where reference numbers must be quoted).
- Enter any notes if you want the employee to see them on their pay slip.
- Enter the date this inclusion is to commence.
- Choose when this inclusion should cease (a specific end date, never or once a particular dollar amount has been reached).
- Click on 'Save'.
Setting up Preserved Earnings
Preserved earnings is defined as the minimum net earnings an employee MUST be paid before a deduction amount can be applied in the pay run. For example, an employee could have a garnishee order but part of the order includes that the employee's net pay cannot be reduced to less than $300 per week as a result of the garnishee order. To set this up of example, you would:
(a) Preserved earnings: select 'Once a minimum net earnings limit has been reached';
(b) Preserved earnings amount: enter 300;
(c) If the amount is not reached: here you can choose to have none or only part of the deduction amount processed in the pay run;
(d) Carry forward unpaid deduction amounts: here you can choose whether or not you want any unpaid deduction amounts to be carried over to following pay runs. For example, say an employee’s recurring deduction amount was fixed at $100 per pay run but only $50 was deducted in the pay run. If you choose to carry forward the unpaid deduction amount, the unpaid $50 will be carried over and a total of $150 will be deducted in the following pay run. If you choose not to carry it over, the unpaid $50 deduction amount will be disregarded and in the following pay run only the recurring $100 will be deducted.
(e) Carry forward unused preserved earnings: here you can choose whether or not you want any preserved earnings that are paid below the preserved earnings carried forward. For example, an employee has preserved earnings set at $300. In one pay run the employee is only paid $200 in net earnings. If this setting is ticked, the difference of $100 will be carried over so that the preserved earnings for the next pay run will be $400.
An example of a Deduction paid to the IRD with a 60% preserved earnings is as follows:
Checking the status of a deduction
You can quickly see the status of expiring deductions by coming back to the employee Pay Run Inclusions screen.
Once you’ve setup your deductions, a summary of the deductions will be displayed which will include:
- The amount or date at which the deduction will expire
- The start date of the deductions
- Whether or not the deduction has actually expired
- For amount based deductions, the current amount that has been paid
- The payment type setup for this deduction
Note: A deduction expiry date means "will not be included in pay runs where the pay period starts after this date" and NOT the date paid.
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