There may be instances where you need to take additional deductions from employees so 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. Some examples of other types of deductions include deductions for union dues, voluntary deductions, salary overpayment etc.
How to set up a deduction
Setting up a "Deduction" is similar to setting up a "Benefit." The biggest difference is that instead of selecting "Benefits" from the "Benefits & Deductions" dropdown you select "Deductions."
Step 1: Create 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 on the top right corner.
- Click the dropdown menu under the "Type" field and select the deduction type. 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. Learn how to request a custom deduction type. Note that it's the same process as requesting a custom benefit.
- 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."
Step 2: Add Employee(s) to the Deduction
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.
- 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.
Once you've selected the required employees, click the "Select" button.
Step 3: Configure the Deduction settings: Effective Date, Employee Premium and Frequency
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.
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
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."