Arrearage Methods

An arrearage occurs when the payroll system could not deduct an amount from the employee's pay because the employee did not earn enough to pay for the deduction.

The system can manage DBA arrearages in these ways:

• The first time an employee is paid during the pay period, the system attempts to collect DBA amounts.

  If a remainder still exists when the new pay period begins, that remaining amount is arreared into the new period for collection.

• Each time an employee is paid during the pay period, the system attempts to collect any remaining DBA amounts.

  If a remainder still exists when the new pay period begins, that remaining amount is arreared into the pay cycle for collection.

• Each time an employee is paid during the pay cycle, the system attempts to collect any remaining DBA amounts.

  If a remainder still exists when the new pay period begins, that remaining amount is not arreared into the new pay period for collection. This arrearage method is used for DBAs such as a deduction for a charitable contribution.

The system can also track DBA balances and limits across multiple companies (indicated by tax ID). If you have an employee that works for multiple companies during the course of a single pay period, the system tries to collect all appropriate DBAs plus any arrearages or balances each time the employee is paid.

Arrearage collection across companies (by tax ID) is dependent upon company options for history retrieval. If you do not choose to retrieve history across tax IDs, then an arrearage balance is not collected across multiple tax IDs.

The system adjusts negative pay in different ways, depending on the arrearage method that you use.