Involuntary Deduction Fees for the US
Whenever the payroll process takes a deduction, it also takes the appropriate involuntary deduction processing fees.
Fee processing involves:
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Types of fees
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Fee priority
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Payee definition
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Payee assignment
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Fee waiving
What Types of Fees You Can Use
You can impose these types of fees.
Type of fee |
How it's used |
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Organization fees |
These are court or agency-ordered fees. These fees can be:
Note:
The payroll process deducts these fees only if you specify a fee payee. These states have predefined organization fees for support orders.
|
Processing fees |
As the employer, you might charge an administrative fee for processing your employees' involuntary deductions. Without a payee, these fees don't appear on the payslip.
These fees can be:
Note:
All Involuntary Deduction secondary classifications support these fees except:
There are no predefined processing fee values for the Debt Collection Improvement Act (DCIA) and Educational Loan classifications. |
Person fee |
The payee for an employee-requested deduction. |
How You Set the Fee Priority
The payroll process uses multiple predefined jurisdictional rules to enforce involuntary deduction fee priority. The details of them all is beyond the scope of this document.
For these secondary classifications |
These are the rules |
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Creditor Debt Garnishment |
The payroll process automatically calculates and applies one of these fee priorities.
|
All others |
For all other secondary classifications that support fees, the payroll process:
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How You Define the Payee
Use the Third Parties task to define each payee recipient as either a person or organization.
For further info, see Third-Party Payment Methods in the Help Center.
You can use a third-party organization payee for the involuntary deduction payments, such as for the order amount payee. Be sure to select External Payee as the party usage code when configuring the payee.
How You Assign Payees to a Deduction
After you have defined the payee and attached them to an appropriate payment method, associate it to the involuntary deduction.
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From My Client Groups, click Payroll.
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Click Calculation Cards.
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Search for and select the employee.
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Open their Involuntary Deductions Card for editing.
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Create or edit the calculation component associated with the involuntary deduction.
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Select Calculation Component Details, and expand Involuntary Deduction Payment Details.
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For each applicable fee type, enter the payee.
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Save your work.
You must include a processing fee payee if you're deducting processing fees and you want the fee to show on the employee's payslip. If you don't, the payroll process doesn't enforce the fee's legislative limits.
How You Waive Fees
Processing fees and organization fee amounts are predefined. To waive a processing fee, use the Calculation Value Definitions task to set the fee value to $0 for your LDG.
To waive a fee for a specific employee:
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Use the Calculation Cards task to open their Involuntary Deductions card for editing.
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Select the calculation component associated with the fee's involuntary deduction.
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Click Enterable Calculation Values on Calculation Cards.
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Click Create.
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Search for and add <type> Processing Fee Per Pay Period Amount.
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Enter the new amount, and click OK.
You can waive multiple fee types simultaneously using HDL. For further info, see Oracle Cloud Human Capital Management for the United States: Need to Set All Involuntary Deduction Fees to Zero In All PODS (2306182.1) on My Oracle Support.