Setting up Deductions

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Walkthrough video on getting started with deductions

PLEASE NOTE: This video contains images of the "old" KeyPay payroll dashboard. Access your deductions by clicking on the 'Pay Run Inclusions' option via the Payroll Settings tab, here on the dashboard:

QBO users get to Payroll Settings by clicking on the ‘Payroll Settings’ button:

Simplify your payroll by setting up deductions which can be automatically paid to a bank account or super fund as well as set to automatically expire after a certain date or time.

Getting started with deductions

The first thing you need to do to start using deductions is to setup your deduction categories. This allows you to setup specific deduction categories which can be tailored to the needs of your business.

To setup a deduction category:

  1. Go to Payroll Settings > then "Deduction Categories": 

     

  2. There will already be 3 basic deduction categories for you (FBT, Pre-Tax Deduction and Post-Tax Deduction) you can edit any of these by clicking on the name of the deduction category. To add a new deduction category click the green “Add” button in the top right corner
  3. Enter a name for the deduction category, select whether it will be a pre or post tax deduction and use the other settings there if required - click save.

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.

Once you have setup your deduction categories they will now be available to be assigned to employees.

Setting up an indefinitely recurring deduction

Follow these steps setup a deduction that recurs indefinitely:

  1. Go to the employee record for the employee that you want to create the recurring deduction for and under the “Pay Run Settings” section click “Pay Run Inclusions”

  2. You will then be taken to the following screen:
  3. Click on “Add” on the right side of "Deductions" and complete the following details:
    • 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, a Percentage of Gross earnings or Percentage of OTE.
    • Select whether the deduction should be paid manually, to a super fund, a bank account or via a BPAY account. If you are setting up salary sacrifice super or member voluntary, select the super fund option, then select the fund. To pay this deduction directly into another bank account, via the ABA file from the pay run, you'll need to have first set up the bank account on the employee's record / bank accounts page (set the amount to pay as Fixed and $0) so you can choose this bank account from the drop down list and you can add a 'reference' in the Payment Reference field. Additionally, to pay the deduction via a BPAY account, you'll need to have first set up the BPAY account on the employee's bank accounts page (set the amount to pay as Fixed and $0) so you can choose this BPAY account from the drop down list. 
    • Please note for Child Support Agency (CSA) deductions the employee's reference number goes in the Payment Reference field. 

    • 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 Save

Now, the next time you process pay run that includes this employee, the deduction will automatically appear:

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 expiries, the current amount that has been paid
  • The payment type setup for this deduction

If you have any questions or feedback, please let us know via support@yourpayroll.com.au

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