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. 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.

Adding an Employee-level Deduction

  1. Navigate to Employee Deductions
    • Go to: Payroll > Employees > Employee List
    • Select the employee’s name.
    • Click on Deductions & Contributions.
  2. Add a New Deduction
    • Click +Add a New at the top right.
    • 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 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.
      • 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.
        • HSA catch-up contributions are eligible for employees aged 55+ in the current year.

Editing or Deleting a Deduction on an Employee

  • Edit: Click Edit to update fields or toggle Active status. Save changes.
  • Delete: Click Delete to remove unused deductions. Note: Deductions already applied in payroll cannot be deleted.

Deduction Priorities

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

  • 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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