Deduction Information window

Linked Payable Account is the account (usually a liability account) in which all the deducted money will be accrued. The Default Withholding Payable Account you specified when setting up payroll appears as the default. You should change this default if you want to track the deduction separately. For example, if you are deducting union fees, create a Union Fees Payable liability account. This way, the balance sheet will display the deductions separately from your taxes and other deductions.

Type of Deduction is one of the following choices:

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User-Entered Amount per Pay Period should be selected if you want to manually enter a specific amount for each employee each pay period. Note that manually entered deductions should be entered as negative values.

note : Student Loan Recovery deduction

If the amount entered has pence, the amount will automatically be rounded down to the nearest pound to meet HMRC reporting requirements.

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This option allows you to enter a percentage of any of the wage categories. This amount will be deducted until the deduction limit (see Deduction Limit is one of the following choices:) is reached.

Type or select the wage category on which the calculation is to be based. Alternatively, you can select Gross Wages, which totals all wage categories (hourly and salary) you pay an employee.

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This option allows you to deduct the specified amount per pay period, per month, per year or per hour. This amount will be deducted until the limit (see Deduction Limit is one of the following choices:) is reached.

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[Student Loan Recovery only] Calculate Student Loan Deduction If you choose this option then the amount will automatically be calculated using the employee’s gross pay. The calculation of the threshold amount is based on the employee’s pay frequency. The amount calculated will be rounded down to the nearest pound to meet HMRC reporting requirements.If you used the user-entered amount and now choose this option the amount in recurring pay will be removed and a calculation will take its place. The payroll history for this category will remain the same.

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Deduction Limit is one of the following choices:

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No Limit signifies no limit to the amount of money that can be deducted from the employee’s paycheque for this category.

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This option results in the maximum deduction amount being a percentage of a wage category. For example, a deduction might be £50 per pay period up to a maximum of 50% of the employee’s base salary. Alternatively, you can select Gross Wages, which totals all wage categories (hourly and salary) you pay an employee.

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This option results in the maximum deduction being a fixed amount per pay period, per month or per year. For example, a deduction might be 10% of the employee’s gross wages up to £1,500 per year.