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Company-Level Deductions

In this article:

Background

What Is a Payroll Deduction?

A payroll deduction is money withheld from an employee’s paycheck to pay a third party on their behalf. Examples include:

  • Pre-tax deductions: Health insurance premiums, 401(k) contributions
  • After-tax deductions: Loan repayments, wage garnishments, employee purchases

See our Payroll Glossary: Deductions for a full definition, or read An Overview of Payroll Deductions for more context.

Deductions vs. Contributions

In Patriot Software:

  • A deduction is withheld from the employee’s paycheck and affects net pay.
  • A contribution is a company-paid amount. It appears for informational purposes only and doesn’t affect employee pay.

💡Patriot Software does not transmit your deductions or contributions to third-party providers—unless your 401(k) provider is our partner Vestwell or you use NEXT for pay-as-you-go Worker’s comp.
You’re responsible for sending those funds to the appropriate parties.

How to Add a Company-Level Deduction

Before assigning a deduction to an employee, you must first set it up at the company level.

  1. Go to Settings > Payroll Settings > Deductions & Contributions
  2. Under the Deductions section, click Add New
  3. Enter the required fields.
  4. Save your changes.

Once added, the deduction can be assigned to employees. For instructions, see Employee-Level Deductions.

How to Edit an Existing Company-Level Deduction

  1. Go to Settings > Payroll Settings > Deductions & Contributions
  2. Click the Edit icon next to the deduction you want to make changes to
  3. Update the necessary fields
    • Note: If the deduction has already been used in payroll or assigned to an employee, the Deduction Type and Method fields will be locked
    • Other fields remain editable
  4. Click Save
    • If you change a default value that’s used on an employee record, the employee’s deduction will update automatically

More details: Why Can’t I Edit a Company-Level Deduction?

How to Delete a Company-Level Deduction

You can only delete a company-level deduction that has not been used in payroll or payroll history.

  1. Go to Settings > Payroll Settings > Deductions & Contributions
  2. Click the Delete icon next to the deduction
    • This option only appears if the deduction hasn’t been used in a payroll
  3. Confirm deletion by selecting Yes. Select No to cancel this action.

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