Summary

Deductions are the amount that is deducted from an employee's pay. They represent the credit side of the general ledger balance sheet.

Examples of Deductions

Some examples of deductions are:

• Student Loan
• Court Deductions (Fixed Amount)
• Medical Insurance

What uses Deductions?

Deductions are used in Standard or Manual Pays.

Reporting

If insufficient thought is given to the design of deduction codes, reporting may be limited. For example, the reporting level is different for Superannuation, Union, Court Costs, Clothing, Advance Repayment etc.

Legislative Needs

Often deductions must be created to monitor payments to the taxation department, Courts, Child Support, Student Loans etc.

Accounting Needs

The financial department of your organisation must be involved in setting up deduction records, as a correct interface with the general ledger system is essential.