There may be instances where you need to take additional deductions from employees. If you need to set up a deduction for your employee, you're in the right place!
What Are Deductions?
Deductions are payments taken from an employee's pay cheque. Some common examples of these government-mandated deductions that may come to mind are CPP, EI and Income Tax.
However, if you need to set up a deduction separate from these, you can easily do so in Humi. Other types of deductions include union dues, voluntary deductions, salary overpayments, and more.
Provincial Guidelines for Overpayment Deductions
If you need to create a deduction because you've overpaid an employee, read this article, which summarizes overpayment and deduction guidelines for each province based on the Employment Standards Act (ESA).
Depending on your province, you might need to provide written notice or obtain consent before recovering overpaid amounts. Learn more here.
How To Set Up A Deduction
Setting up a deduction is similar to setting up a Benefit. The key difference is that you select Deductions from the Benefits & Deductions dropdown instead of Benefits. Click on each step below to learn how to set up a deduction.
- In Payroll, click on the Benefits & Deductions tab and select Deductions from the dropdown menu
- To create a new deduction, click the + Create Deduction button in the top right corner
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Click the dropdown menu under the Type field and select the deduction type
Note
You can request a custom deduction type if there are no relevant deduction types by clicking the Request Custom Deduction link next to the + Create Deduction button. This is the same process as requesting a custom benefit. Learn how to request a custom benefit or deduction type.
- After choosing the deduction type, you'll need to add a name for the deduction. The deduction name entered here will be will displayed on the employee’s pay stubs and in reports
- You can also add a GL Code Payable if needed
- Once you've completed the required fields, click Save
Now that you've created the deduction, you'll see it displayed on the Deductions table. The next step is adding the required employees to the deduction you just created.
- Click on the deduction you just created
- Click on the Employees tab
- On the top right corner, click on the Add/Remove Employees button
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In the Assign Employees pop-up, select the employee(s) you want to add to the deduction
- To find the employees you need, you can do so in a few ways:
- Use filters to find the employees you need. You can filter by department, position or employment status. For example, if you want to add benefits to Onboarding employees, then you can filter by Onboarding status.
- Search by the employee name using the search box
- Click Select Page to quickly select all employees
- To find the employees you need, you can do so in a few ways:
- Once you've selected the required employees, click the Select button.
Effective Date: The Effective Date of the deduction will default to the date that you've added the employee to the deduction. If you want to schedule the deduction for a later date, click the calendar icon and choose a future date.
Note
Similar to benefits, Humi Payroll will not prorate deductions. This means if the Effective Date is in the middle of a pay period, the full premium amount will be deducted from the employee's pay cheque. The premium amount won't be prorated or adjusted for the actual days the employee worked.
Employee Premium: Premium amounts can be set up as a dollar value or a percentage based on their compensation. This amount will be deducted from the employee's pay cheque.
Frequency:
This section will allow you to set when you'd like the employee premiums to be deducted from your employee's pay cheque. The default is each pay period, but if you prefer a different frequency, use the dropdown menu to select any of the following options:
- The first pay period
- The second pay period
- Last pay period
- Each pay period
- Just once
Important note
If this deduction is for an overpayment and the employee can pay it back as a one-time payment, ensure that you change the frequency to "Just Once."
Humi Tip
If you want to apply a deduction in bulk to many employees at once, you can do so by following these instructions in the support article but under the Deduction tab instead of Benefits.
Go to Payroll > Benefits & Deductions > Select Deductions from the dropdown > Click on the deduction from the table > click the Employees tab > follow the instructions here.