Designate Pretax Elements for Nonperiodic Earnings for Canada

When you add pretax deduction elements, you can assign the deduction to both the regular and nonperiodic earnings or only the nonperiodic earnings.

By default, when an employee has regular and nonperiodic earnings in the same pay period, the pretax deduction is applied in this order:

1. The pretax deduction is first used to reduce the regular earnings.
2. If the regular earnings are reduced to zero, the remaining pretax deduction amount reduces the nonperiodic payment.
3. If the nonperiodic payment is reduced to zero, the remaining pretax element is used to reduce lumpsum payment, if any.

However, if you select the option to designate the pretax deductions only for nonperiodic earnings, the pretax deduction is used only to reduce the nonperiodic earnings.

To designate the pretax deductions only for nonperiodic earnings, answer Yes to this question on the pretax element template, 'Should this element apply only to nonperiodic earnings?'.

Consider the following while designating pretax deductions only for nonperiodic earnings.

Considerations for Designating Pretax Elements for Nonperiodic Earnings

Pretax Element Template Question	Selection
Process element only once in each payroll period.	No
Process and pay element separately or with other earnings elements?	Process and pay with other earnings
What should happen when there are insufficient funds to cover the deductions?	Select either one of these: Do not take a partial deduction or create arrears Take a partial deduction, but do not create arrears
Is this element subject to iterative processing?	No