1How Do I Configure Iterative Processing for Pretax Deductions

Sometimes a pretax deduction is equal to or higher than the person's gross pay. When this happens, the payroll process can withhold it iteratively. This makes sure it properly withholds higher priority deductions, like taxes and involuntary deductions.

For example, an employee has elected for 100% of their salary be deferred for pretax 401 (k). Although they're deferring their entire salary, that deferral is still subject to Social Security and Medicare taxes and certain state and local taxes. In this case, you would enable iteration for your 401 (k) element. When you run your payroll, the process withholds the required taxes before taking the 401 (k) deduction, up to the maximum limit.

To enable iterative processing for new elements:

1. Define the element as normal using the Elements task.

2. Select Yes for the Is this element subject to iterative processing template prompt.

To enable iterative processing for existing elements, use the Element Upgrade Process. For further info, see Oracle Cloud Human Capital Management for the US: Element Upgrade (2458385.1) on My Oracle Support.