(CAN) Insufficient Net Pay and Pay Calculation

For Canadian processing, if a before-tax deduction results in insufficient net pay, the deduction calculation process restarts and processes each deduction in sequential order, based on the deduction priority number. If there is insufficient net pay to cover a before-tax deduction entirely, the deduction is ignored. No partial before-tax deduction amounts are processed.

Positive Net Pay Amount with No Additional Deductions Taken

Sometimes, checks with net pay greater than zero are issued, even though it appears that more deductions could be taken. This can occur when there are high pre-tax deductions that do not allow partial deduction, low gross pay, and a high additional withholding amount.

When a deduction cannot be fully taken due to insufficient net pay, the system sets a flag (CALC-TAX-YES) and begins a recalculation loop using the PSPPYNET.cbl (Gross to Net Calculation) module. The module repeatedly performs the following steps:

1. Calculate deductions

2. Calculate taxes

3. Deduct taxes from gross pay

4. Apply pre-tax deductions in sequence

5. Apply after-tax deductions in sequence

If a deduction cannot be fully taken, the system reduces the deduction to what can be taken or sets it to zero (if partial deduction is not allowed). This process repeats, adjusting deduction amounts each time, until either all possible deductions are made or no further deductions can be taken. The loop ends when the CALC-TAX-NO flag is set.