What's covered in this guide?
What is a deduction?
Deductions are used to take money from an employee’s gross pay, based on agreements between the business and employee, or if it’s genuinely beneficial to the employee.
Common examples of deductions include:
Salary sacrifices
Resolving overpayments
Repayments of purchases made through the company
Certain industry awards will specify other authorised deduction scenarios.
Create a deduction type
Navigate to Payroll > 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)
Relevant STP category
Use the tick boxes to confirm if the deduction:
Reduces tax
Should be included in w1 reporting
Reduces workcover
Reduces payroll tax
Click the Create button once finished to save the new deduction.
Assign deductions to employees
Once a deduction has been created, add it to the profiles of the applicable employees.
Navigate to the Staff tab
Select the employee from the list
Click + Add next to the Deductions section
Select the relevant Payroll deduction type from the drop down list
Enter the Fixed amount to be taken when the deduction is applied
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 an employee from the list included in the pay run
Scroll down to view which deductions are applying, what account they’re paid out of, and the amount being deducted
How deductions appear on payslips
Employees with deductions applying to their wages will have this clearly visible on their payslips, including the deduction type/name and the amount.
Payslips can be previewed in each employee’s individual pay run summary.
Find the Deductions section under Tax.