This help guide will explain deductions in Tanda, including how to create deductions and how they appear on pay runs, pay slips, and ABA files.

What is a Deduction?

Deductions are used to deduct money from an employee’s gross pay based on either:

a) Agreements between the business and employee;

b) Or if it’s genuinely beneficial to the employee.

Common examples of deductions include:

Child Support Payments
Repayments of purchases made through the company

Certain industry awards will specify other authorised deduction scenarios.

Create a Deduction Type

Navigate to Payroll > Settings > Deduction Types and click the + New button.

When creating a new Deduction Type, enter the following fields:

Name (as it will appear on the payslip)
Payroll account (choose from any accounts set up in your journal. If you're not sure, check out our Configuring your Payroll Journals help guide)
Relevant STP category

Use the tick boxes to confirm if the deduction:

Reduces PAYG Withholding
Reduces payroll tax
Reduces super

Tick whether the deduction should use individual bank details for each employee, otherwise enter the bank details the deduction should be paid to in the ABA file. Learn more about individual bank details below.

Click the Create button once finished to save the new deduction.

You can also configure how this looks on your ABA File through the "Bank details" section. See the section 'How Deductions appear on ABA Files' at the bottom of this article for more details.

Individual Bank Details

Ticking 'Use individual bank details' will remove the bank details section from the Deduction Type itself. Instead, you will enter bank details on the employee's profile when adding an automatic deduction.

This is used for deductions such as charity deductions, where the amount from each employee with this deduction is paid to different accounts.

To do this, ensure you tick the following setting in the Deduction Type (Payroll > Settings > Deduction Types).

Then, when you add this deduction type to an employee profile under the Payroll tab, there will be a section to add Individual Bank Details.

Recurring Deductions

Payslips will automatically be populated with Deductions added to employees' profiles. Once a deduction has been created (using the steps in Create a Deduction Type), add it to the profiles of the applicable employees with the following steps:

Navigate to Workforce > Staff
Select the employee from the list
Navigate to the Payroll tab
Click + Add next to the Deductions section
Select the relevant Payroll Deduction Type from the drop-down list
Enter the Fixed amount or Percent of income to be deducted
Enter a Deduction Cap (maximum amount to be paid) if applicable
Enter the start/finish dates that the deduction should apply to, if applicable
Tick if the deduction should be included in the ABA file
Click the Create button

How Deductions Appear on Pay Runs

After assigning deductions to relevant employees, the deductions will appear on their pay runs.

To view the applying deductions:

Navigate to the current pay run through the Run Payroll tab
Select the employee
Scroll down to the Deductions section

To manually add a deduction to a payslip, find the Deductions section of the payslip and click + Add.

How Deductions Appear on Payslips

Payslips can be previewed in each employee’s individual payslip by clicking Preview Payslip File.

And will be shown as follows:

How Deductions Appear on ABA Files

Deductions will be added to their own line only if:

The "Pay in ABA" option has been ticked on the deduction line in the payslip
And either:
- The deduction has a bank account allocated
- The deduction has an STP category of "Child Support Deduction" or "Child Support Garnishee"

If the STP category is allocated to "Child Support Deduction" or "Child Support Garnishee", the bank account will allocate as below:

Account name: Services Australia
BSB: 092-009
Account Number: 116755

If the STP category is not allocated to "Child Support Deduction" or "Child Support Garnishee," the bank account will be allocated as per the Bank details on the Deduction Type.

If the Bank Details are blank and the STP category is not allocated to "Child Support Deduction" or "Child Support Garnishee," nothing will show on the ABA file. No additional line will be added.

FAQ

Will the Protected Earnings Amount (PEA) Be Enforced on Recurring Deductions?

Yes, the Protected Earnings Amount will be applied based on the STP category of the deduction to align with the regulatory requirements set by Services Australia. Here’s how it works:

Earnings Below PEA: If an employee’s gross earnings for the pay period are below the Protected Earnings Amount threshold, child support deductions will not apply. This safeguard ensures essential earnings are protected for employee welfare.
Earnings Above PEA: For earnings that exceed the threshold, deductions are applied automatically based on the configured amounts.

How can I configure Novated Leases in Tanda?

Novated leases are set up using deductions. You create a deduction type for the lease, then add it to each employee’s profile using the details from their lease agreement.

1. Create the deduction type

Create a deduction type and set the name, journal account and STP category to suit your needs. Then:

Tick Reduces PAYG Withholding if the lease is paid pre-tax, or leave it unticked if it is paid post-tax.
Tick Use individual bank details so the lease provider’s bank details can be set on each employee’s profile.

Using individual bank details is optional—if only one employee has a novated lease, you can set the bank details on the deduction type instead. However, setting them on each employee’s profile may be easier to manage, particularly if employees have leases with different providers or you need to pay the providers manually.

If you have both pre-tax and post-tax lease payments, create a separate deduction type for each.

For example:

Note: if the vehicle is an FBT-exempt electric vehicle, you may also want to tick Reduces payroll tax. These leases are generally pre-tax salary sacrifice deductions that reduce both PAYG withholding and payroll taxable wages.

2. Add the deduction to the employee’s profile

Add a deduction template to the employee’s payroll profile and enter the details from their lease agreement. This may include:

The fixed amount to be deducted each pay run
The bank details of the lease provider
The Total Amount to Be Paid, under the cap setting
The From and To dates

As payments are made, the total will appear in the template on the profile.