Protected Pay for Canada

For each province and type of involuntary deduction, a portion of the earnings paid to an employee is exempt from involuntary deductions. These earnings are referred to as protected pay. The remainder of the earnings is considered disposable income.

Regardless of multiple assignments or multiple runs in a pay period, protected pay is applied.

Use the Enterable Calculation Values on Calculation Cards tab on the Calculation Cards page, to create individual entries and define the rules. The payroll process calculates the protected pay amount based on the rules you configure on the involuntary deduction card for the employee.

You can configure protected pay rules for each involuntary deduction type as a protected pay amount, protected pay percentage, or a combination of both. You can have different methods of calculating protected pay as given below.

Multiple Deductions of the same Deduction Type

If an employee has multiple deductions of the same deduction type, the highest value derived for protected pay is determined within each deduction type. The process applies that value to all other deductions of that same deduction type.

For example, consider a case where multiple Garnishments are configured with different rules, one with a protected pay percentage of 40, and the other with a percentage of 50. The higher percentage of 50 is applied as the protected pay percentage for both Garnishments for the employee. In the same way, you can have one Garnishment with a protected pay amount of 300 and a protected pay percentage of 50. In this case, both protected pay entries are used to calculate the highest value of the two. This value is compared to other Garnishment entries to come up with a final protected pay value for Garnishments.

Multiple Deductions of Different Deduction Types

If the deduction types are different, the highest protected pay doesn't apply across deduction types. Each deduction type determines its own protected pay value.

The order in which the elements are processed is determined by the subprocessing order. If a Maintenance and Support deduction is processed first, that deduction impacts how much of the disposable income is available for subsequent deductions processed.

For example, consider a case where a Maintenance and Support deduction is configured with a protected pay percentage of 50 and a subprocessing order of 1. In addition a Garnishment deduction is configured with a protected pay percentage of 80 and a subprocessing order of 2. The disposable income remaining for the Garnishment is affected by the first calculation of protected pay of the Maintenance and Support deduction. There may not be enough disposable income left to guarantee the 80 percent protected pay rule, so there is no Garnishment deduction.