Payroll Help

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Employee-Level Deductions

In this article:

Background

You can deduct amounts from employee paychecks for various reasons, such as benefits, 401(k) contributions, loan repayments, wage garnishments, or purchases.

Understand terms in Patriot Payroll:

  • “Deductions” reduce an employee’s pay.
    • Even though traditional vernacular calls what an employee puts into their 401(k) a “contribution” to a retirement plan, it is still a deducted amount from pay, and therefore a deduction in Patriot.
  • “Contributions” are what employers pay that is beyond employee pay, such as amount the employer pays for health insurance, or a 401(k) employer match. This does not increase an employee’s pay but does appear on the paystub to indicate extra money being spent for the benefit of the employee. See our help article, “How to Set Up Company Contributions.”
    • Most employee deductions can have an employer contribution, except for Starter 401(k) and Starter Roth 401(k).

Adding an Employee-level Deduction

Deductions must first be set up at the company level before assigning them to employees. See our help article Company-level Deductions for more information. After you have set up the deduction at the company level, you can assign it to your employee.

  1. First set be sure to set up your company-level deduction. After you have created that you will assign it to the employee
  2. Go to Payroll > Employee List > {Employee’s name} > Deductions and Contributions
  3. Click+Add a New at the top right of the Deductions section
  4. Click the drop down to choose from the company-level deduction list you have created to assign to your employee
    • Default fields set on the company-level deduction will populate, but you can override defaults per employee as needed
  5. Fill out the fields as follows:
    • Deduction: Choose from the dropdown list of company-level deductions. To add a new one, set it up at the company level first
    • Active: Default is checked. Uncheck to pause/inactivate the deduction
    • Method: Fixed Dollar or Percent (set at the company level, not editable here)
    • Type: Defined at the company level (read-only here)
    • Amount: Enter the deduction amount or percentage. To override the default, select “Use a Custom Amount“
    • Limits (optional): Define limits for pay date, month, year, or lifetime. Override defaults with “Use a Custom Amount” or leave blank to remove limits. The software will appropriately apply yearly IRS limits for HSA, FSA, 401(k)s, IRAs, etc, deductions
    • Catch-Up: Select “Yes” if applicable for tax-exempt contributions exceeding regular limits
      • 401(k), 403(b), etc. options include:
        • No
        • Yes: 50+ this year
        • Yes: 60–63 this year (Super Catch-Up).
          💡 If you set one deduction to super catch-up all other applicable deductions for the same employee with the setting as “Yes: 50+ this year” will automatically also be treated as super catch-up, although the setting itself does not change on each deduction. Starter 401(k)/Roth Starter 401(k) plans do not qualify for super catch-up.
      • Starter 401(k), Roth Starter 401(k) catch-up contributions are eligible for employees age 55+ in the current year
      • HSA catch-up contributions are eligible for employees age 55+ in the current year
  6. Click “Save.”

How to Edit a Deduction on an Employee

  1. Go to Payroll > Employee List > {Employee’s name} > Deductions and Contributions
  2. Click “Edit” to update fields
  3. Click “Save”

How to Delete an Employee Deductions

Deductions already applied in payroll cannot be deleted only inactivated.

  1. Go to Payroll > Employee List > {Employee’s name} > Deductions and Contributions
  2. On the deduction list, find the trash can icon at the end of the deduction row you want to delete
    • If you do not see a trash can, it is because it has been used in a payroll and cannot be deleted. You will need inactivate the deduction instead
  3. Click “Yes” to confirm the deletion of the deduction

How to Inactivate an Employee Deduction

  1. Go to Payroll > Employee List > {Employee Name} > Deductions & Contributions
  2. Click Edit on the deduction you want to inactivate.
  3. Uncheck the “Active?” status box
  4. Click “Save.”

Deduction Priorities

When an employee’s paycheck cannot cover all deductions, the system prioritizes deductions based on their order in the list.

  1. Go to Payroll > Employee List > {Employee Name} > Deductions & Contributions
  • Reordering Deductions
    • Drag and drop rows using the blue arrows on the left side.
  • Priority Handling
    • The system deducts amounts row by row until no pay remains. If the first deduction cannot be fulfilled, it skips to the next, and so on.

[RELATED ARTICLES: An Overview of Payroll Deductions]
[DEFINITION: Deductions]

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