Deduction Profile

Deduction Code

A reference automatically assigned to identify the profile.

Description

A description of the profile up to 10 characters.

Type

An option that determines the type of deductions associated with the profile.

You can select one of the following from a list:

• Blank The default setting for any deduction types other than those identified below:

• C For charity donations.

• P For employee pension contributions based on earnings. This can be calculated either with or without taking into consideration the lower and upper earnings limits for NI contributions. The application takes into account the upper and lower earnings limit for pensions on the employee record. If these are both zero, the limits specified on the Set Options form are taken into account. If these are both zero, the limits recorded on the NI tables are used.

• V For employees AVC. These operate in the same was as P deductions, they simply provide a separate breakdown of AVCs.

• X For a deduction designed to accumulate employer's pension. This deduction type behaves similarly to deduction type 'A', except no deduction is made from the employee's pay.

• H For accumulating holiday pay. This deduction type behaves similarly to deduction type 'A', except no deduction is made from the employee's pay.

• R For deductions against a reducing balance, such as loan repayments. Each repayment is deducted from the current balance until it reaches zero, then the repayments cease.

• L For student loan repayments.

• A For accumulator type deductions that are added into a running total and accumulated for as long as required.

• N For NI Adjustments.

• O For Attachment Orders.

• G For Postgraduate loan repayments.

When you add deduction types 'P', 'X', 'V' and 'H' to the employee's record using the Payments and Deductions form, you can enter them as a percentage by typing the '%' symbol in the percentage column before the value.

Pension Scheme

A reference that identifies the pension scheme. This only applies if you are using the advanced pension processing facilities and a pension deduction type P, V or X.

Attach. Order Type

An option that determines the type of attachment order. You can select from a list. This only applies if you have selected 'O' for Attachment Order in the Type list box. The options available are:

• Priority AEO

• Non-Priority AEO

• Deduction from Earnings Order (DEO)

• Community Charg AEO (CCAEO)

• Council Tax AEO (CTAEO)

• Earnings Arrestment(EA)

• Current Maintenance Arrestment (CMA)

• Attachment Admin Fee

• Magistrates Courts Fines AEO (MCF)

• Direct Earnings Attachment (DEA) - Table (The deduction amount for DEAs is normally calculated using different tables of bandwidths and percentages for weekly and monthly paid employees supplied by the Department of Works and Pensions (DWP).
  
  This type of deduction does not need to be agreed in civil court. It also does not replace any existing attachment orders. The DWP will send a notice (including a payment schedule) to employers when the DEA needs to be implemented for an employee.
  
  For more information see www.gov.uk/government/publications/direct-earnings-attachments-an-employers-guide.)

• Direct Earnings Attachment (DEA) - Fixed (In some circumstances the DWP will allow an alternative fixed amount to be deducted for DEAs.
  
  This type of deduction does not need to be agreed in civil court. It also does not replace any existing attachment orders. The DWP will send a notice (including a payment schedule) to employers when the DEA needs to be implemented for an employee.).

You can only create one deduction type per attachment order type.

The 'Attachment Admin Fee' type is used to record any administration fee the employer chooses to charge the employee. It is only available if the Deduct Admin Fee option is selected on the Options Page 3 tab of the Payroll Options form.

Print If Zero

An option that determines whether the deduction defined by this profile is printed on employee payslips regardless of the value.

Multiply for Holidays

An option that determines whether deduction values associated with the profile are multiplied for holidays by the number of weeks the employee is taking. This only applies to employees paid weekly. If the option is not selected, the deduction will be made in the last working period paid before an employee’s holiday, that is, the current pay period at the time of payment, but not for the holiday periods.

Print Balance

An option that determines whether the balance of deductions associated with the profile is printed on employee payslips.

Balance Description

A balance description of up to 10 characters. This only applies if you have selected the Print Balance option. The description prints alongside the deduction balance on the payslip.

Auto Align

An option that determines the default position of the cursor for the entry of period deductions you make using the Deductions command on the Processing form. The selection determines in which column of the form the cursor is initially located. You can select one of the following from a list: N (for 'none' if you do not want to specify a default), 1 Permanent, 2 Temporary, 3 Units and 4 Rate.

Mask NL Code

An option that determines whether the nominal ledger account code for deductions associated with the profile are 'masked' for analysis purposes. See the Nominal Codes Help topic for details about masking.

Nominal Code

A reference that identifies the nominal account code for the analysis of deductions associated with the profile. If you have either the Payroll to Nominal or Payroll to External Nominal option selected on the Options tab of the Company Profiles form in the System application, you can select an account from a list. In this case, the accounts will be defined either using the Accounts command on the Maintenance submenu of the Nominal application or the Nominal Accounts command on the Maintenance submenu of the Payroll application.

If the Advanced Nominal Ledger is used and the chosen Nominal Ledger code is linked to one or two  additional dimensions (like project or department codes), the following payments will be analysed to those dimensions:

- All payments to the employee
- Any statutory deductions that are a cost to the employer, for example employers NI
- Any employee deductions that are a cost to the employer, for example 'type X' pension contributions.

As employee-only costs employee pension contributions or student loan repayments do not affect the employer, they are not analysed to additional dimensions.

Retain Units

An option that determines whether units recorded for deductions associated with the profile are retained after you use the Update command.

Deduct Before Tax

An option that determines whether deductions associated with the profile are taken before PAYE is calculated.

Warning: This option is ignored if you define a deduction on an employee's record as a percentage deduction. Percentage deductions are always calculated on gross pay. This applies to P, X and H deduction types.

Deduct Before NI

An option that determines whether deductions associated with the profile are taken before National Insurance contributions are calculated.

Warning: This option is ignored if you define a deduction on an employee's record as a percentage deduction. Percentage deductions are always calculated on gross pay. This applies to P, X and H deduction types.

Deduct Before Pension

An option that determines whether deductions associated with the profile are taken before pension contributions are calculated. If you have a pensionable deduction, the deduction code must be before the pension deduction code. Where advanced pension processing is in use, the positioning of the deduction code is not important since all pre-pension deductions will be taken before all pension contributions are calculated.

Deduct Before Holiday

An option that determines whether deductions associated with the profile are taken before holiday funds are calculated. If you have a deduction that is subject to holiday fund calculations, that deduction code must be before the holiday deduction code.

Deduct Before Attachment

An option that determines whether deductions associated with the profile are taken before attachment order deductions are calculated.

Important: Before setting a deduction profile to be deducted before an attachment order, check with the relevant court, local authority, child maintenance service or other originator of the attachment order that it is the correct thing to do.

Negative Hol Fund

An option that determines whether a holiday deduction type of 'H' can have a negative balance.

Er's Salary Sacrifice NI Saving

An option that determines whether your employer National Insurance savings are contributed as a 'top-up' to employees' pensions.

The Add Employer's NI Saving to Contribution option for the pension scheme on the Payroll - Maintenance - Pension Scheme form must also be selected. You can set up the scheme to add all your NI savings or a percentage of the savings.

You can reduce your contributions to your employee's pensions by setting up pension schemes in Opera so that calculations are done on their pay after the salary sacrifice has been deducted. This is controlled by the Calculate Employer's Contribution on Post-Sacrifice Pay option on the Payroll - Maintenance - Pension Scheme form.

This applies if the Advanced Pensions Processing option is selected on the Payroll - Utilities - Set Options form.