Enter a number (0-32,767) to uniquely identify this deduction or liability.

Determining the Code Sequence

Enter a description for this deduction or liability, up to 30 characters.

For Canadian users

If you want the descriptions on the pay stubs to appear in French and English, make sure that this field includes both French and English.

You should not create separate deductions/liabilities for French and English. Instead, create a bilingual description for the codes you want to use on the bilingual stubs.

Deduction – Select this option if this code defines an employee’s payroll deduction (e.g. federal tax, state tax, etc.).

Liability – Select this option if this code defines an employer’s payroll liability (e.g. FICA, FUTA, SUTA, etc.).

Enter the liability type (from HQ Liability Types) for this liability code. The liability type determines which GL account to debit when expensing this liability to either a PR or JC department. You may want to group similar liabilities together (e.g., taxes, insurance, union benefits, etc.).

Specify the category for this deduction/liability that identifies the type of calculation that should occur during processing.

• Federal

• State

• Local

• Insurance

• Craft

• Employee

• Any

When a payroll timecard batch is processed, the various routines that calculate federal, state, local, insurance, craft, and employee deductions check to make sure the D/L code is in the right category.

(Canada) The Federal Type drop-down on the PR Deduction and Liabilities form, Info tab.

Enabled only when the Calculation Category is F-Federal.

Specify the type of federal deduction or liability.

• 1-Withholding

• 2-CPP

• 3-QPP

• 4-Employment Insurance

• 5-QPIP

For use with Federal 'Calculation Category' only.

Specify the type of federal deduction or liability.

• 1-Withholding

• 2-FUTA

• 3-Social Security

• 4 -Medicare

This option is only used to breakdown Withholding, Social Security, and Medicare amounts when making Federal tax payments via EFT. When the PR AP Update is run, if “Automatic Update to Accounts Payable” is in use and the vendor’s “Addenda Type” is ‘Tax Payment’ (in AP Vendors), one addenda tax payment record is created and the amount distributed to the appropriate addenda field (W/H, Soc Sec, or Medicare) for the transaction. A separate record will be created for FUTA EFT payments. If no ‘Federal Type’ is specified, amount is distributed to the withholding field.

Enter the GL account to credit for this deduction or liability code. It must be a valid account set up in the GL Chart of Accounts form of the GL Co# specified in PR Company Parameters and the subledger type must be blank.

Method drop-down on the PR Deductions/Liabilities form, Info tab.

Select how the deduction or liability is calculated from one of the following:

• A-Amount
• D-Rate per Day
• F-Factored Rate per Hour
• G-Rate of Gross
• H-Rate per Hour
• N-Rate of Net
• S-Straight Time Equivalent (earnings/factor)
• DN-Rate Based on Deduction Code (must enter a valid Deduction Code)
• V-Variable, Rate of Earnings Based On Factor
• R-Routine (must enter a valid Routine).

The system displays this field when you select “Rate of Net” from the Method drop-down field.

Enter the garnishment group for this deduction.

This field only displays when Method is R-Routine.

Enter the routine (from PR Routines) that will be used to calculate the deduction or liability amount.

Enter the “primary” rate or amount used when calculating a deduction or liability with a Method of Days, Hours, Rate, or Net. Also used as the “resident” rate for some state and local taxes. (If entering a rate, enter 5% as .05, 10% as .10, etc.)

Enter the “secondary” or “nonresident” rate or amount that is used for some state and city taxes. (If entering a rate, enter 5% as .05, 10% as .10, etc.)

Indicate how the annual deduction/liability limit will be interpreted.

• No Limit – Select this option if no limit applies. (Amount, Applied, and Rate fields are set to 'Null' and disabled.)

• Subject Amount – Select this option if the limit is applied on the subject amount. Subject amounts are typically earnings, but based on the calculation method. This option can be used either for deductions and liabilities with income limits and a single rate (e.g. FICA, SUTA), or for deductions or liabilities with an income limit and variable rate (e.g. Nevada Worker's Comp. State Unemployment (SUTA) must be set up using this limit amount.

• Calculated Amount – Select this option if the limit is applied on the deduction or liability's calculated amount. This option is used for deductions and liabilities with income limits and a single rate. However, do not use this for SUTA.

• Rate of Earnings – Select this option if the limit is a rate of total earnings (e.g. 401k employer's match). Total earnings will be based on the earnings codes assigned in the grid. If this is a 401k employer's match, this will typically be all earnings codes that are flagged as 'Subject Only'.

Enter either the total subject amount that is eligible or the calculated amount that can be made for this deduction or liability within the period specified. The limit basis (specified to the left) determines how this amount is interpreted. If no limit applies, or the limit basis is 'Rate of Earnings', this field is disabled.

Required. (Enabled only if limit basis is 'Subject Amount' or 'Calculated Amount'.)

Specify the time frame for the limit amount from one of the following:

P -Pay Period - Limit is applied using amounts from the current pay period and sequence. (If limit basis is 'Rate of Earnings', this limit period is assigned automatically and cannot be changed.)

M-Monthly - Limit is applied using amounts from the current pay period and sequence, earlier sequences within the same pay period, and previous pay periods that used the same Limit Month (specified in PR Pay Period Control). Monthly limits are not applied based on employee accumulations.

Monthly limited deductions and liabilities may appear to exceed their limit when reviewing employee accumulations if a payroll is processed using a Limit Month that differs from the paid month (i.e. payroll is processed in one month, but paid the following month.)

Q-Quarterly - Limit is applied based on the amounts from the current pay period and sequences, as well as the employee accumulations for all months within the quarter. If not using a split-month pay period, limits are applied using the Payroll beginning month (i.e. 1st Month). If using a split-month pay period, the ending month (2nd Month) will be used for quarterly limits. If the employee is paid in the beginning month (e.g. layoff) and then reprocessed, limits will now be applied using the paid month (1st Month). This may result in different calculated amounts and resulting net pay. Therefore, you should review deductions to make sure they are accurate based on the quarterly limits.

A-Annually - Limit is applied based on the amounts from the current pay period and sequences, as well as the employee accumulations for all months within the year. If not using a split-month pay period, limits are applied using the Payroll beginning month (i.e. 1st Month). If using a split-month pay period, the ending month (2nd Month) will be used for annual limits. If the employee is paid in the beginning month (e.g. layoff) and then reprocessed, limits will now be applied using the paid month (1st Month). This may result in different calculated amounts and resulting net pay. Therefore, you should review deductions to make sure they are accurate based on the annual limits.

L-Lifetime - Limit is applied based on the amounts from the current pay period and sequence, and all previous payrolls, without regard to month or year.

Unlike monthly limits, quarter, annual, and lifetime limits are all based on amounts stored in the PR Employee Accumulations table. These amounts are always updated based on paid month.

Enabled for 'Rate of Earnings' limit basis only.

Specify the limit rate for this liability. This is the total rate of earnings that will be eligible for this liability per pay period.

For example: If your plan pays 8% of the first 25% of earnings, the calculation for this rate would be .25 x .08 = .02. The .02 is the rate you enter in this field, and the Rate/Amount would be -.25.

Check this box to correct the calculated deduction/liability amount if a limit has been exceeded. This might be used if there is a change to the limit and you want to correct a calculation for the limit period. This only applies when the pay period’s subject amount is positive. Using this option may result in a negative amount calculated.

Do not check this box if you do not want to automatically correct a calculation if a limit has been exceeded. If not checked, the calculated amount for the pay period is always zero when the limit has been exceeded.

Check this box if this deduction/liability is limited to payment sequence #1 only.

Do not check this box if this deduction/liability will be calculated on all payment sequences.

The Calculate as Rate of Gross on Bonus Sequence check box on the PR Deductions/Liabilities form, Info tab.

This field displays only for US companies (those set up in HQ Company Setup with a Default Country of US).

Select this check box to override the method of calculation when processing bonus payment sequences. This will apply to all employees that are subject to this deduction or liability and is typically used to override federal tax withholding calculations.

Do not select this check box if the method of calculation should not be overridden when processing bonus payment sequences.

The Bonus Rate field on the PR Deductions/Liabilities form, Info tab.

This field displays only for US companies (those set up in HQ Company Setup with a Default Country of US).

Enter a bonus rate if you are overriding the calculation method on bonus sequences. The bonus rate must fall between 0.00 and 1.00 (e.g. overriding federal tax with a .28 rate).

The Use YTD Accumulations to Correct Rounding Errors check box on the PR Deductions and Liabilities form, Info tab.

Rounding errors that are insignificant in one pay period may accumulate to material amounts over several pay periods.

Select this check box to have the the system calculate the YTD amount, compare it to what has been accumulated so far this year, and adjust the amount for this pay period accordingly.

The calculation for this pay period is Amount = [(YTD Subject + Pay Period Subject) * Rate] – YTD Amount

Check this box to have the final calculation amount for this deduction/liability rounded to the nearest whole dollar.

Do not check this box if final calculations for this deduction/liability should not be rounded.

Check this box if this deduction or liability’s subject and eligible amounts are accumulated by employee and month. This option must be checked for all codes with subject amount limits, or those required for reports (e.g. federal and state taxes). Accumulations are always made in the month paid.

Do not check this box if subject and eligible amounts are not kept.

Check this box to exclude accumulations for this deduction/liability from deletion when other employee accumulations are purged. Accumulations are left in the file until they are specifically deleted.

Do not check this box if the accumulations for this deduction/liability should be deleted when other employee accumulations are purged.

Enabled when the Type section is set to Deduction and either C-Craft or E-Employee is selected in the Calculation Category drop-down list.

Select this check box to specify that this deduction should not be included when the system processes tax-related deduction codes.

When this check box is selected and the Calculation Category drop-down is set to E-Employee, the system enables the Pre-Tax Group field.

If this deduction code has been added to the basis of another deduction (on the Basis Codes tab), you will be unable to clear this check box until you remove the code from the Basis Codes tab.

The Catch up Deduction check box on the PR Deductions/Liabilities form, Info tab.

Enabled when the Pre-Tax Deduction check box is selected.

The 401k Liability check box on the PR Deductions/Liabilities form, Info tab.

This field is only enabled when you select the Rate of Earnings Limit type.

Select this check box if this is a 401k employer match liability. When selected, the Pre-Tax Group field is enabled to allow specifying the pre-tax deduction group used to determine the annual compensation limit for 401k employer match liabilities.

The Pre-Tax Group field on the PR Deductions/Liabilities form, Info tab.

Enter the pre-tax deduction group for this deduction or liability code, or press F4 to select from a list of valid pre-tax deduction groups.

You should enter a group here when you have multiple 401(k) deductions or 401k employer match liabilities that require a combined limit.

This field is enabled when:

• Type is set to Liability,
• Calculation Category is set to either C-Craft or E-Employee, and
• Method is set to G-Rate of Gross, R-Routine, A-Amount, or H-Rate per Hour.

Check this box to designate a specific liability code as one that could be included in the basis code list of specific deduction codes. These deduction codes include those where:

• Calculation Category is set to F-Federal, S-State, L-Local, I-Insurance, or E-Employee, and
• Method is set to G-Rate of Gross or R-Routine.

Print as separate detail line on standard certified reports field in the PR Deductions/Liabilities form

Select this check box if you want Certified Payroll reports to print a separate line for this deduction or liability. If selected, the report includes the description entered for this deduction or liability.

Leave this check box cleared if you do not want a separate line for this deduction or liability on Certified Payroll reports. If not selected, the amount for this deduction or liability is included in the ‘Other’ category on Certified Payroll reports.

LCPtracker: Dedn Class Type drop-down on the PR Deductions/Liabilities form.

LCPtracker Fringe Benefit Type field on the PR Deductions/Liabilities form

(Optional) Select one of the following fringe benefit classifications to be used with the LCPtracker export:

• H - Health and Welfare

• V - Vacation/Holiday/Dues

• A - Apprenticeship Fund

• P - Pension

• O - Other - individual rates for liability codes with this classification will be combined to determine the average rate used in the report.

eMars Dedn Class Type field on the PR Deductions/Liabilities form

For Deductions, this field is required and its default value is Other.

If you want to indicate the report column where amounts for a given deduction code should be reported, select one of the deduction type classifications for the PR Certified Export - eMars (ReportID 1315, U.S. only).

Any tax deduction code (Federal, Social Security, Medicare, Add’l Medicare, State, or Local) should be classified as X - Tax. The report determines which codes pertain to which type of tax and assigns amounts accordingly to appropriate report columns.

eMars Fringe Benefit Type field on the PR Deductions/Liabilities form

This field is enabled only for Liabilities.

If you want this liability to be reported as a fringe benefit, select one of the fringe benefit classifications for the PR Certified Export - eMars (ReportID 1315, U.S. only).

The report excludes any liability code that is left unclassified (blank).

AASHTO

• Fr Other

Check this box to automatically create AP transactions from the amounts calculated for this deduction/liability. When payroll is processed, vendor information is assigned for updating Accounts Payable. Updates to AP can occur after the pay period is closed.

Do not check this box if this deduction/liability is not to update AP.

Enter the vendor used for creating AP transactions to pay this deduction or liability. The vendor can be overridden by Craft (PR Crafts, Dedns/Liabs tab) and/or employee (PR Employee Dedns/Liabs, Vendor field).

This field is enabled only when the Automatic Update to Accounts Payable box is checked.

Check this box to create a separate AP transaction for each Vendor/PR Group/PE Date/DL Code/Employee combination. This is used primarily for garnishments, and applies only to employee-based deductions and liabilities.

Uncheck this box to create a single AP transaction for each Vendor/PR Group/PE Date/DL Code combination.

Only used if updating Accounts Payable.

Specify the payable type to credit when posting AP transactions with this deduction/liability.

Only used if updating Accounts Payable.

Specify the frequency at which transactions posted with this deduction/liability will be updated to AP. Must be a valid frequency code set up in HQ Frequency Codes.

The Aatrix Tax Type field in the PR Deductions and Liabilities form, Addl Info tab.

Enter the 4-digit Aatrix tax type. Press F4 to look up and select from a list of valid tax types.

Entry in this field is only required if the following are true:

• you are using Aatrix to file your state or local tax reports

• this deduction or liability code is subject to state or local tax reporting

• you are using Aatrix for unemployment reporting

Enabled only for deductions with a "Calculation Category" of 'Employee' or 'Any'.

Check this box to have this deduction included as a local tax on W-2's. You should only check this box if this deduction will not be assigned to any specific locality in PR Local Codes (e.g. Ohio School District tax).

Do not check this box if this deduction should not be included as a local tax on W-2s, or if this deduction should be included as a local tax, but will be assigned to a specific locality in PR Local Codes.

Required. (Enabled only if "Include on W-2s as a Local Tax" option is checked.)

Specify the reporting state for this deduction (i.e. the state to which this deduction applies). Must be a valid state set up in HQ States.

Required. (Enabled only if "Include on W-2s as a Local Tax" option is checked.)

Specify the local to which this deduction applies, up to 10 characters. Must be a unique local not already set up in PR Local Codes that identifies the city, county, or other local taxing district for the specified reporting state.

Required. (Enabled only if "Include on W-2s as a Local Tax" option is checked.)

Specify the tax type for this deduction. When W-2's are initialized, the tax type specified here will be used as the default tax type on Local Info tab (PR W-2 Employee Information). Options are:

• C -City Income Tax

• D-County Income Tax

• E-School District Tax

• F-Other

Include In STP Gross Amounts check box in the PR Deductions/Liabilities form, Addl Info tab (Australia only)

Not used for STP Phase 2.

Select this check box in order to include amounts for this deduction or liability within calculations of employees' year-to-date reportable gross earnings (PAYG Items 'INBGross' and 'HolidayGross') for STP reporting.

When you select this check box on a deduction code, the system subtracts each employee's calculated deductions amounts from their reportable gross earnings during STP processing.

When you select this check box on a liability code, the system adds each employee's calculated amounts to their reportable gross earnings during STP processing.

(Australia) The Include in Employee Gross Amount Calculation check box on the PR Deductions/Liabilities form, Add'l Info tab.

For use with STP Phase 2 only.

This field is only enabled for Liability codes.

Select this check box to include this liability in STP Phase 2 employee Gross amount calculations.

Leave this check box unselected if this liability should not be included in STP Phase 2 employee Gross amount calculations.

(Australia) The Include in Reportable Fringe Benefit Amount (RFBA) Calculation check box on the PR Deductions/Liabilities form, Add'l Info tab.

Used for STP Phase 2 only.

Select this check box to include this deduction or liability in the calculation of STP Phase 2 employee reportable fringe benefits amounts.

Leave this check box unselected if this liability or deduction should not be included in STP Phase 2 employee reportable fringe benefits amount calculations.

(Australia) The Include in Reportable Employer Super Contribution (RESC) Calculation check box on the PR Deductions/Liabilities form, Add'l Info tab.

Used for STP Phase 2 only.

Select this check box to include this deduction or liability in the calculation of STP Phase 2 employee RESC amounts.

Leave this check box unselected if this liability or deduction should not be included in STP Phase 2 employee RESC amount calculations.

(Australia) The STP Category drop-down on the PR Deductions/Liabilities form, Add'l Info tab.

For use with STP Phase 2 only.

Select the appropriate category (if any) for STP Phase 2 reporting of this deduction or liability.

Select the type of code that you want to add to the calculation basis for this deduction/liability. The following options are available:

• E-Earnings - Select this option if you want the system to include this earnings code's posted amounts in the deduction or liability's subject amount.
• D-Deduction - Select this option to specify a pre-tax deduction that the system should not include in the basis for calculating the deduction or liability.
• L-Liability - Select this option to include a liability in the basis calculation for a deduction if the following criteria from the Info tab applies:
  • Calculation Category is set to F-Federal, S-State, L-Local, I-Insurance, or E-Employee, and
  • Method is set to G-Rate of Gross or R-Routine.

Enter a valid earnings or deduction code, based on your selection in the EDL Type drop-down field. Press F4 for a list of valid earnings or deduction codes.

If you specify an earnings code, the system will include its amount in the deduction or liability's subject amount.

When adding deduction codes, you can only add pre-tax deductions (you checked the Pre-Tax box in PR Deductions/Liabilities). Additionally, you can only add pre-tax deductions to deduction/liability codes that have the Calculation Category drop-down set to F-Federal, S-State, L-Local, or I-Insurance, and the Method drop-down set to either G-Rate of Gross or R-Routine. When you add a pre-tax deduction here, the system will not include it in the basis for calculating the deduction or liability.

Check this box if the earnings are to be included in the subject amounts only (and not the calculations) for this deduction or liability.

Do not check this box if the earnings are to be included in both the subject amount and the basis for calculation for this deduction or liability.

Examples of Typical Uses

For deductions, a typical example would be for federal withholding. Earnings that are 'subject only' will be included in the “Wages, Tips, and Other Compensation” amount on the W-2, but will not be included in the basis for calculating withholding tax on a pay check.

For liabilities, it is a method to distribute the liability to earnings without the earnings being a basis for the calculation. For instance, if you are setting up an employer's 401k matching liability, and you want the employer's liability to be distributed to the original earnings, you would set up the liability as follows:

• Assign the 401k earnings along with straight time, overtime, and other earnings in the grid.

• Flag all earnings, except the 401k earnings, as 'subject only'.

• Assuming that negative earnings are not included in liability distributions (you did not check the True earnings for Payroll Reports box in PR Earnings Codes), this will allow the liability to be distributed across the regular earnings rather than with the 401k earnings, and to be updated to JC.