PR> Maintenance> Deduction/Benefit

Deduction/Benefit Maintenance

Summary

The Deduction/Benefit Maintenance window is used to create and maintain deductions and benefits. The selection in the Ded/Ben drop-down field (PR> Maintenance> Deduction/Benefit> Ded/Ben field) will determine if the code is a deduction or a benefit. Deductions and benefits are attached to employee records using the Employee Maintenance window (PR> Maintenance> Employee> Deductions tab). When a time card is created and payroll is calculated (PR> Computer Checks> Calculate Payroll), the deductions and benefits attached to the employee record will be used to generate the payroll check.

When creating deductions and benefits, you must select which gross wages (FICA, Medicare, federal/state/regional/other tax, unemployment, etc.) will be affected by the deduction or benefit. You select which gross pay amounts are affected by a deduction or benefit by checking the Affect toggle of the gross pay you would like to affect. For example, check the Affect Federal Tax, Affect State, and Affect FICA toggles if you would like to affect the gross pay of those amounts. If you are creating a deduction, the affected gross pay amounts will be reduced, creating a pre-tax deduction. For example, if you are creating a deduction and check the Affect Federal Tax toggle, the deduction amount will reduce federal tax gross pay amount. If you are creating a benefit, the affected gross pay amounts will be increased, creating a taxable benefit. For example, if the Affect Federal Tax toggle is checked, the benefit will increase the federal tax gross pay amount.

The Deduction/Benefit Maintenance window is also used to set up the default deductions and benefits that are attached to new employees. Deductions and benefits that are set up as defaults will populate on employee records when they are created.

If you would like to set up a direct deposit on an employee, set up the employee’s bank as a deduction and attach it to their employee record (PR> Maintenance> Employee> Deductions tab). There is a separate document that describes how to set up a direct deposit.

The FICA deduction should be maintained annually in order to keep the salary maximum and step amounts current for each tax year. Most organizations maintain a separate FICA deduction for the employee and employer portion, so make sure both are updated.

When W-2's are generated on employee records, you will be able to manually assign deductions/benefits to specific W-2 boxes (for example, Box 11 Nonqualified Plan).

Click here for information on how Revisions are applied to Computer Checks.

Step by Step

2 Create or modify a deduction/benefit.

The General tab is used to enter the general information on the deduction or benefit.
The Ded/Ben drop-down menu is used to select if you are creating a deduction or a benefit.

If Benefit is selected, the amount of the benefit will be added to any gross wage calculation that is selected (Affect Federal Tax, Affect State Tax, etc.).
If Deduction is selected, the amount of the deduction will reduce any gross wage selected.
If you are creating a workers' compensation code deduction, the selection in this field determines how the deduction will be calculated. If you select Benefit, the deduction will be calculated using the employer portion of the workers' compensation code. If you select deduction, the deduction will be calculated using the employee portion of the workers' compensation code.

You can view the employer and employee portions on a workers' compensation code using the Workers' Compensation Code Maintenance window (PR> Maintenance> Workers' Compensation> Employee Dollars and Employer Dollars fields).
Click here for information on Workers' Compensation Code Maintenance.
Click here for an overview on Workers' Compensation Codes and Setup.

The Code field is used to enter a deduction/benefit code. The code can be up to six alphanumeric characters.
The Description field is used to enter a description of the deduction/benefit. The description can be up to 30 alphanumeric characters long.

The description of the deduction or benefit will display on the Check Proof List (PR> Computer Checks> Check Proof List).
If you do not enter a description, the deduction or benefit will not display on the check stub, even if the Print on Stub toggle is checked. Make sure to enter a description if you would like the deduction or benefit to display on the check.
If the Print on Stub toggle on the Deduction/Benefit Maintenance window is checked, the description will also display on the check stub (PR> Computer Checks> Checks).
The description is also the primary method of identifying the deduction or benefit when an employee makes enrollment decisions in the Open Enrollment online application.

The Notes field is used to enter comments and notes on the deduction/benefit. The Notes field does not display on checks or on the standard reports.
The Type field is used to associate the deduction or benefit with an existing Deduction/Benefit Type.
- Deduction/Benefit types are created and maintained on the Deduction/Benefit Type Maintenance window (PR> Maintenance> Deduction/Benefit Type). Click here for information on Deduction/Benefit Type Maintenance.
The Linked Ded/Ben field is used to specify another deduction/benefit that will also be attached to the employee record when an employee enrolls in this deduction/benefit through the Open Enrollment online application.
- This feature is most often used when an organization offers an additional benefit to employees that enroll in a particular deduction/benefit. Click here for information on the Open Enrollment online application.
The Vendor Number field is used to attach a vendor to the deduction or benefit.
- The new deduction or benefit will create an AP module invoice for this vendor when it is attached to an employee that is processed in a Computer Checks or Manual Checks batch.
- Accounts Payable module vendors are created and maintained using the Vendor Maintenance window (AP> Maintenance> Vendor). Click here for information on Vendor Maintenance.
The State and State Tax ID fields are used for creating standard state deductions. Select the state from the drop-down menu and enter the corresponding state tax ID for the state where the new deduction will be applied.
- These fields will only be active if Deduction is selected in the Ded/Ben field on the General tab and From table and Tax are selected in the Calculation Method and Wage Type fields on the Calculation tab.
- You can only create one state deduction per state. Once a state deduction is created, it can also be used when setting up multi-state deductions.
- Multi-state deductions will appear in the State Deduction drop-down menu on the Quarterly Wage report. Click here for information on the Quarterly Wage Report.
The Order and Aggregate Code fields are used to attach the deduction/benefit to an aggregate deduction/benefit group and to assign it an order within that group.
- Aggregate deduction/benefit groups are used to combine multiple deduction or benefit amounts in order to compare that total to annual or lifetime maximum amounts. This functionality will enable the system to automate capping the annual maximum for deferred compensation deductions.
- Click the Aggregate Code field to select an existing aggregate deduction/benefit group that you would like to assign the deduction/benefit to. Aggregate deduction/benefit groups are created and maintained on the Aggregate Deduction Maintenance window (PR> Maintenance> Aggregate Deduction). Click here for information on Aggregate Deduction Maintenance.
- Once the deduction/benefit has been assigned to an aggregate group, use the Order field to set the order in which the deduction/benefit will be processed within that group.
Check the Active toggle if the deduction/benefit should have an active status. When deductions/benefits are attached to employee records, by default only Active status deduction/benefits will display in the selection window. Users will still be able to attach inactive deductions/benefits to the employee record by changing the filter in the selection window.
Check the Default toggle if the deduction should be added to new employee records when they are created using the Employee Maintenance window. Default deductions/benefits that are attached to the new employee record can be removed when the employee is set up.

The default start date of the deductions added to a new employee record is defined in the Setup window (PR> Utilities> Setup> Deductions tab> Default Start Date field).

The Always eligible toggle is used in conjunction with the unions set up in the Human Resources module. Check this toggle if all employees, regardless of union, can use the deduction or benefit.
- The Always eligible toggle determines if the deduction or benefit is specific to a union. When this toggle is checked, the deduction or benefit can be attached to any employee.
- When this toggle is not checked, only employees that belong to a union with the deduction or benefit attached can use it (HR> Maintenance> Union Unit> Deductions or Benefits tab). If the deduction or benefit should only be used by a specific union unit, do not check the Always eligible toggle and add the deduction or benefit to the union unit.
- If you check this toggle, you can still add the deduction or benefit to a union unit and set it up as a required record, but the deduction or benefit can also be attached to employees that do not belong to a union unit. For example, if you are creating a deduction or benefit that is used by the members of a specific union unit, but should also be available employees that do not belong to the union unit, check the Always eligible toggle and add the deduction or benefit to the union unit (HR> Maintenance> Union Unit> Deduction or Benefits tab).
- Click here for an Overview on Union Units.
- Click here for information on Union Unit Maintenance.
Check the Allow Negative toggle if the deduction or benefit can be a negative amount. This will increase the amount of the check.
Check the Print on Stub toggle if the deduction/benefit should print on the employee stub. If you do not check this toggle, the deduction or benefit will not display in the detail line items on the paychecks generated in the Computer Checks process.
Select the wages that will be affected by the deduction/benefit in the Gross to Increase section.

When creating deductions and benefits, you must select which wages (FICA, Medicare, federal/state/regional/other tax, unemployment, etc.) will be affected by the deduction or benefit. Benefits (taxable benefits) will add money to the selected wages. Deductions (pre-tax deductions) will remove money from the selected wages bucket.

Select the Default Cycles for the deduction/benefit.
- When the deduction or benefit is attached to an employee record, the default cycles will be automatically selected. These can be edited on the employee record (PR> Maintenance> Employee> Deductions or Benefits tab> Deduction or Benefit section).

3 Compete the Account tab.

The Account tab is used to add GL accounts to the deduction/benefit. If you are creating a deduction, only the Default Credit Account section will be enabled. If you are creating a benefit, you must add both a debit and a credit account. (You select if you are creating a deduction or benefit in the Type drop-down menu on the General tab.)

Benefit - When creating a benefit, the Default Debit Account and Default Credit Account sections are both enabled because when a benefit is attached to a computer or manual check, the benefit results in both a debit and credit. If you leave the Default Debit Account section blank, the debit account will be pulled from the GL account selected to debit the gross amount of the paycheck. Click here for information on how the GL account used to debit the gross amount on the timecard is selected.
Deduction - When creating a deduction, only the Default Credit Account section is enabled. Leave the fund number section blank if you would like the fund number to be pulled from the primary fund defined on the Setup window (PR> Utilities> Setup> General tab> Primary Fund field).
Vendor Paid - If there is an AP module vendor attached to the deduction or benefit on the General tab (General tab> Vendor field), the deduction or benefit will create an AP module invoice when it is attached to an employee that is processed in a Computer Checks or Manual Checks batch. The GL account in the Default Credit Account section will be the GL account that is attached to the invoice line item generated for the deduction or benefit amount.

The selection in the Deduction and benefits follow task toggle on the Setup window (PR> Utilities> Setup> Deductions tab) affects which GL accounts attached to the deductions and benefits will be used in the journal entry created by the Computer Checks process when a timecard line item is attached to a Project Management module task code.

When a Project Management module task code is attached to a timecard line item, the GL account on the line item will override the debit GL account on the benefit and will be used to record the benefit. The debit GL account on the time card line item will also be used to record the deduction.
If the Deduction and benefits follow task toggle is not checked and there is a GL account attached to the time card line item, the debit account attached to benefit will be pulled from the benefit record (PR> Maintenance> Deduction/Benefit> Accounts tab> Debit Account field). The debit account to record the deductions will still be pulled from the GL account attached to the time card line item.

Add GL accounts to the benefit or deduction.

Click the Default Debit Account or Default Credit Account field search button to select a GL account from a list. The entire GL account will populate in the field.
You can remove a portion of the GL account if you would like that portion to be pulled from another location.

If you leave the fund blank, the fund will be pulled from the GL account on the employee distribution (PR> Maintenance> Employee> Distribution tab).

4 Complete the Calculation tab.

The Calculation tab is used to set up how the deduction/benefit will be calculated.
Use the Calculation Method drop-down menu to choose a method for calculation. When the deduction/benefit is attached to an employee record (PR> Maintenance> Employee> Deductions or Benefits tab), you can select which step amount will be attached to the deduction/benefit.

Select Flat amount if the deduction/benefit is a flat amount. Enter the flat amount in the Amount column in the Revision Steps section.
The Per hour worked, Per day worked, and Per week worked selections are used to calculate a benefit or deduction based on the hours, days, or weeks on the paycheck.
- Select Per hour worked if the deduction or benefit amount should be calculated using the number of hours that are associated with a specific gross amount. This will enable the Wage Type drop-down menu to select which wage type you would like to use to calculate the deduction or benefit.
Select Per day worked if you would like to calculate the deduction or benefit based on the number of days worked between the period begin and period end date on the paycheck. For example, if a Computer Checks batch has a period begin date of 10/01/2024 and a period end date of 10/30/2024, the value in the Revision Steps section will be multiplied by the number of days in the period, or 30 (in this example, it would be 10/30/2024 less 10/01/2024).
- Because the days in period value is automatically calculated in this manner, you will need to change the days in period value on the Pay Schedule Maintenance window if you only want to calculate the days actually worked (PR> Maintenance> Pay Schedule> Days column in the Maintenance grid). Click here for information on Pay Schedule Maintenance.
- For example, for a two-week pay schedule the Days Per Period is automatically set to 14. However, it is likely that only 10 of those days were actual work days, so you will need to change this value to prevent incorrect calculation of total days worked.
Select Per week worked if you would like to calculate the deduction or benefit based on the number of weeks between the period begin and period end date on the paycheck. For example, if a Computer Checks batch has a period begin date of 10/01/2024 and a period end date of 10/30/2024, the value in the Revision Steps section will be multiplied by 4.28571 (in this example, 30 days in the period divided by 7 days in the week).
Select Percent of salary if the deduction/benefit should be calculated using the employee’s salary per pay period. Enter the percentage amount in the Amount column in the Revision Steps section. For example, if an employee has a salary of $5000 per pay period, entering 1% in the Amount column will generate a deduction/benefit of $50. If the time card was modified so the amount on the check does not equal the salary per pay period amount, the salary amount will still be used.
Select Percent of Net if the deduction/benefit should be calculated using the net pay on the paycheck. Enter the percentage amount in the Amount column in the Revision Steps section. For example, if an employee has a net paycheck of $1050, entering 1% in the Amount column will generate a deduction/benefit of $10.50.
Select Percent of gross if the deduction/benefit should be calculated using a gross pay. This will enable the Wage Type field and populate it with the types of gross wages.
Select Percent of deduction if the deduction should be calculated using another specific deduction. This will enable the Wage Type field and populate it with deductions.
- Because Springbrook calculates deductions/benefits in alphabetical order, you should name your deductions/benefits accordingly. For example, you could create a 1% deduction for a uniform allowance and name it UNIFRM. However, if this deduction is meant to be included in the gross wage total to calculate a retirement deduction named PERS, the UNIFRM name must be edited so that the deduction is calculated before the PERS deduction. Because the saved deduction code cannot be edited, you will need to create a new deduction such as 0-UNIFRM.
Select From table if the deduction/benefit should be calculated using the tax table (PR> Maintenance> Tax Table), workers' compensation table (PR> Maintenance> Workers' Compensation), or retirement table. This will enable the Wage Type drop-down menu to select the tax table used to calculate the deduction or benefit.

The Effective Date field is used to enter the date the revision will take effect. If the effective date of a revision is less than the period end date of a Computer Checks batch, the deduction/benefit will be included on the paycheck.

Deductions and benefits will not prorate on a paycheck if multiple revisions take place during a pay cycle. For example, if you create a new deduction revision with an effective date that occurs halfway through a pay period, the new revision will be applied to the entire pay period.
Click here for more information on how revisions are applied to Computer Checks.

Enter a date in the End Date field to enter the date the deduction should stop calculating.

The value in this field is used for reference only.
Press DELETE if you would like to remove the end date from the deduction/benefit.

Enter a maximum deduction or benefit amount in the Annual Maximum, Salary Maximum, or Lifetime Maximum fields to apply a cap to the deduction/benefit. A zero in these fields means that no maximum will be applied.

The Annual Maximum field is the calendar year annual maximum of the deduction/benefit. For example, if a deduction or benefit should not exceed $2,000 during the year.

If the deduction or benefit is calculated using a gross wage (for example, FICA or MEDI), the gross wages that display on the Check Proof List (PR> Computer Checks> Check Proof List) will not display as capped, just the amount of the deduction or benefit.

The Salary Maximum field is enabled when Percentage of Gross is selected in the Calculation Method drop-down menu. This value in this field will be used to cap the amount of gross wages used to calculate the deduction or benefit, this will not cap the amount of the benefit or deduction like the Annual Maximum or Lifetime Maximum fields. For example, if you are creating the FICA deduction, you could enter $102,000 in this field so that FICA will not be calculated on FICA wages greater than $102,000.
- This will affect the gross wages that display on the Check Proof List (PR> Computer Checks> Check Proof List) for that gross wage because the cap will be applied. For example, if this is a FICA deduction that has a salary cap at $102,000, the FICA wages that display on the Check Proof List will be capped at $102,000.
The Lifetime Maximum field spans the length of employment of the employee. When a lifetime max is used and there comes a point where additional money needs to be withheld, those dollars must be added to the total already taken. These maximums can be overridden if there are maximums attached to the employee when the deduction/benefit is attached to the employee (PR> Maintenance> Employee> Deduction/Benefit tab> Lifetime Maximum field).
The Minimum Salary field is used to set a minimum salary value that must be met.
- The Minimum Salary field and Use YTD values for minimum toggle are only enabled when using Percent of gross as the calculation method.

The Annual Start and Lifetime Start fields are used to specify start months and years used when calculating the Annual Maximum and Lifetime Maximum values entered above.
- When calculating limits with the Annual Start date, any batch entries that fall after the specified month in the same year or before the specified month in the next year will be included in the calculation.
- When calculating limits with the Lifetime Start date, any batch entries that fall after the specified batch month and year will be included in the calculation.
- The system will first check the individual employee record (PR> Maintenance> Employee> Deductions or Benefits tabs) to determine the Annual Start and Lifetime Start dates. If the dates are not specified on the employee record, the system will then check the individual deduction or benefit (PR> Maintenance> Deduction/Benefit> Calculation tab) as outlined in this topic. If the dates are not specified on the employee record or the specific deduction/benefit:
  - The Annual Start field will default to January.
  - The Lifetime Start month field will also default to January.
  - The Lifetime Start year field will default to year "0". This means the deduction/benefit start date, with respect to lifetime limits, will coincide with the hire date for the relevant employees.
- NOTE: If these dates ARE set, any batch with the year set to "9999" will be excluded in order to allow for imported batch history. If these dates ARE NOT set, any batch with the year set to "9999" will be included.
The Revision Steps section is used to enter the step amount of the revision.

The steps can be flat amounts or percentages based on the calculation method.
These amounts will be used when the deduction/benefit is attached to the employee using the step from master option.
If you are setting up the FED, or STATE deductions, do not add a step amount to the revision. The tax rates will be pulled from the tax table (PR> Maintenance> Tax Table), not the deduction. Click here for information on tax table maintenance.
If you are setting up a deduction or benefit that will be used with the Open Enrollment online application, the deduction or benefit MUST include at least one revision step. Click here for information on the Open Enrollment online application.