Associate Deductions and Liabilities with Earnings Codes

When setting up earnings codes in PR Earnings Codes, use the Deductions/Liabilities tab to associate deduction (including pre-tax) and liability codes with the earnings codes.

When you add codes to this tab, the system includes the earnings in the subject accumulations and basis amounts for deduction and liability calculations. You can maintain the deduction and liability associations on this tab, or by using the PR Deductions/Liabilities form.

Note: In the case of negative earnings, the system deducts the earnings amount from the accumulations and basis amounts. While you can set up salary reductions as negative earnings, it is recommended that you set up salary reductions as pre-tax deductions. For more information, see Setting Up Pre-Tax Deductions.

To add deduction and liability codes for an earnings code:

  1. In PR Earnings Codes, select the earnings code to which you are associating deductions and liabilities.
  2. Click on the Dedn / Liabs tab.
  3. In the DL Code field, enter the deduction or liability code to add or press F4 to select from a list of valid deductions and liability codes.

    You can add all deductions and liabilities at once by clicking the Add Deductions/Liabilities button. When the confirmation dialog box displays, click OK .

  4. For US Customers only: If applicable, select the Subject Only check box to include the earnings in the subject amount for W-2 purposes, but not include it in the basis of the calculation of the deduction and liability.
    Note: You should rarely need to select this check box; usually only for federal and state withholding taxes (e.g.,Subsistence or moving allowances).

    If you used the Add Deductions/Liabilities button to add deductions and liabilities, you can delete any deduction/liability codes that do not apply to the earnings code. To delete a code, highlight the row and click the Delete button in the toolbar.