Setting Up Limits for a Tax-Deferred Compensation Deduction

Access the Advanced DBA Information form.

Pay Period Limit

Enter the maximum amount that can be withheld or accrued in a pay period for a deduction, benefit, or accrual. This amount is expressed in dollars for deductions and benefits. For accruals, this amount is expressed in hours.

Monthly Limit

Enter the maximum amount that can be withheld or accrued in a month for a deduction, benefit, or accrual. This amount is expressed in dollars for deductions and benefits. For accruals, this amount is expressed in hours.

Quarterly Limit

Enter the maximum amount that can be withheld or accrued in a calendar quarter for a deduction, benefit, or accrual. This amount is expressed in dollars for deductions and benefits. For accruals, this amount is expressed in hours.

DBA For Prior Limit (deduction, benefit, accrual for prior limit)

Enter a code that identifies another DBA whose limit must be met first before this DBA calculates. For example; deduction 1400 has an annual limit of 2,000.00 CAD.

After this limit is met, deduction 1500 begins calculation and withholding.

The DBA number of the predecessor must be lower than the successor's number.

Group Limit Code

Enter a code that is common to all deductions or benefits that share the same limitations, such as pay period currency amount, percentage, monthly, and annual. The system takes these limits from the first deduction encountered in the group and withholds for all deductions until the limit is reached for the aggregate.

Example:

Deduction 6400, Group A, Annual Limit equals 1000 CAD, No Pay Period Limit.

Deduction 6430, Group A, No Annual or Pay Period Limit.

Deduction 7700, Group A, No Annual or Pay Period Limit.

Deduction 9400, Group B, No Annual or Pay Period Limit.

Deduction 7550, Group B, No Annual Limit, Pay Period Limit equals 50 CAD.

For this example, the system determines the deductions that are assigned to Group A, and applies a 1000 CAD annual limit for all three deductions. The system continues to take the deductions from an employee's paycheck until a total of 1000 CAD has been deducted between all entities in Group A for the year. For deductions in Group B, the system deducts no more than 50 CAD per pay period for the two deductions.

Limit Method

Enter a code that indicates the history file that the system uses for DBA limits. Values are:

Blank (default): The system applies monthly, quarterly, and annual limits to calendar month history. The system stores fiscal and anniversary history by pay period ending date. The system updates the F06145 table.

1: Applies monthly, quarterly, and annual limits to payroll month history. Use this method for retirement plans, such as 401(k) or RRSP. The system stores fiscal and anniversary history by check date. The system updates the F06146 table.

2: Applies monthly and quarterly limits to calendar month history and updates the Calender Month DBA Summary History File. The system applies annual limits to fiscal and anniversary history. Fiscal and anniversary history, by pay period ending date, is saved in the F06147 table.

Calendar Month Method

Enter a method to determine how transition months are stored for calendar month history. Transition months occur when the pay period crosses into another month. Values are:

Blank: This is the default. DBAs are prorated to the pay period ending date and the last day of the previous month if timecards exist for both months.

1: DBAs are allocated to the pay period ending date.

Limit on Pay Period Percent - Minimum

Enter the minimum percentage amount that can be specified for the DBA. The amount of the transaction can never be less than this minimum.

Limit on Pay Period Percent - Maximum

Enter the maximum percentage of pay that the calculated deduction or benefit amount may not exceed. This percentage works in conjunction with the dollar limits of the deduction or benefit, so whichever limit is reached first stops the calculation. For accrual transactions, this field represents an hour's limit.

Minimum Hours

Enter the minimum number of hours worked or pieces produced for a DBA to be calculated. If the number of hours worked or pieces produced is less than this amount, the system assumes zero hours when it calculates the DBA. The system uses this field only if the method of calculation is H or I.

Maximum Hours

Enter the maximum number of hours worked or pieces produced that a DBA can be based on. If the actual hours worked or pieces produced are greater than the specified maximum, the system bases the calculation on the maximum. The system uses this field only if the method of calculation is H or I.