Employee deductions are flexible and can be set up for a wide range of purposes. To set up a new deduction, navigate to Employees > Deductions and click “New Deduction”.

The system will ask for the following information:

• Name – Enter a name for the Deduction;
• Deduction control account – The balance sheet account where deductions are posted when running the payroll. These amounts are cleared down when the monies are paid to the relevant recipient i.e. to the tax authority or similar;
• Oncost expense account – The expense account where oncosts e.g. an employers’ National Insurance Contributions, are charged when running the payroll;
• Fixed rate value – Tick if the deduction is a fixed value rather than a percentage;
• Fixed rate oncost – Tick if the oncost is a fixed value rather than a percentage;
• Apply to gross pay – Tick if the deduction is calculated against gross pay value – UK tax and national insurances, student loans and most pensions are calculated on gross rather than net pay;
• Deduction type – Tick the type of deduction from the list;
• Periods – Click “Add period” to add a deduction period and add the following information:
  • To and from dates;
  • Enter a protected net pay value – where the deduction is subjected to protected pay, the deduction may be reduced to preserve the protected value entered here;
  • Add a pay band i.e. the lower & upper limit for the deduction, as well as the deduction percentage / value and oncost percentage / value;
  • Add additional bands if needed.
• Finally, click “Create” and the Deduction will be added to the system.