Company-Level Deductions

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 the 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.
   • Need help with the fields? See Company-Level Deduction Setup: Field-Level Help for extensive explanations of each field.
4. Accounting Software customers: Choose a liability account for your accounting integration.
5. Click “Save.”

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 > Deductions section.
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. Otherwise inactivate the deduction instead of deleting it.

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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