Voluntary Deductions

Voluntary deductions are deductions that an employee chooses to pay through their salary instead of making the payments directly.

The deductible amount is either a fixed amount or a percent of the total earnings during a payroll run. Only certain earnings are taken into account when working out how much money is available to make voluntary deduction payments.

The secondary classification determines how the deduction is calculated. The secondary classifications defined for Voluntary deductions for Canada are:

• Benefits

• Employer Reimbursements

• Loans

• Registered Pension Plan (RPP) or Registered Retirement Savings Plan (RRSP)

• Professional Fees

• Union Dues

For the secondary classification of RPP, it's necessary to capture the seven-digit RPP or Deferred Profit Sharing Plan (DPSP) registration number that appears on the year end forms.

Voluntary Deductions Loan Processing

If an employee has more than one loan, use the Deduction Reference option to define a unique reference for each loan, . You can now maintain voluntary deduction balances for each voluntary deduction. The application automatically creates the input value called "Deduction Reference" for voluntary deduction elements when you enable arrears in the element entry template.

When you create a voluntary element specify a Deduction Reference code for each element entry that has arrears and you enable the total owed options.

The application creates a Deduction Reference input value when either or both of these conditions apply:

1. You select either option for the arrears question.

   • Don't take partial deduction, place all in arrears.

   • Take a partial deduction, place remaining in arrears.

2. You select 'Yes' for the total owed question

The application uses this reference number to maintain deduction accruals and arrears. Enter the reference number while creating an element entry, such as the loan account number given by the bank or a financial institution when a loan is disbursed.

Note: This feature isn't available for existing voluntary elements. It's available only for new elements.

Get Reference Code Formula

Use the Get Reference Code Formula formula to generate a unique reference number using a database sequence for each element entry. You can link the formula to the Deduction Reference input value for the newly created elements, when you don't have a reference number provided by a respective authority such as a Loan Reference Number provided by banks. For example, if an employee is contributing an amount to two different unions without receiving a reference number. But, you have a requirement to capture the arrears separately for each union. You can then use the delivered fast formula Get Reference Code from Database Sequence which generates a unique reference number for each union element entry.

The starting value returned by this formula is 100 and increments by 1 for each new element entry.

You can also write your own fast formula to create a reference number, such as using the Payroll Relationship Number of the employee. Using the same reference number across entries of the same element will combine the balances.