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Since first introducing Pay Run Inclusions we have continued to make further improvements to ensure an ongoing seamless process. Our latest gem of an enhancement specifically relates to recurring deductions.

When setting up an employee recurring deduction, you can now prescribe a minimum net earnings amount that the employee must be paid before all or part of the deduction amount is applied in the pay run. We refer to this as ‘preserved earnings’.

Why apply preserved earnings to recurring deductions?

Ultimately, you eliminate the need of having to manually adjust the amount of any recurring deductions within a pay run when you apply preserved earnings. Rather, KeyPay takes over responsibility and ensures the correct amounts are deducted based on each setting.

How do I apply preserved earnings against recurring deductions?

When setting up a new or editing an existing recurring deduction, you will see the following drop down option:

N.B. The default setting is ‘Never’, until changed by the user.

When you select the second option, the following box will appear:

* The figure displayed here is the total deduction amount(s) carried over and not yet applied in the pay run.

Set up your preserved earnings criteria in 3 easy steps:

  1. Enter the preserved earnings amount;
  2. Select whether none or part of the deduction amount should be applied if the preserved earnings amount is not reached; and
  3. Determine whether you want any unpaid deduction amounts carried over to the next pay run. What does this mean? Say an employee’s recurring deduction amount was fixed at $100 per pay run but only $50 was deducted in a pay run. If you choose to carry forward the unpaid deduction amount, the unpaid $50 will be carried over and a total of $150 will be deducted in the following pay run.

Handy Hint: Setting the preserved earnings amount to $0 ensures recurring deductions are automatically handled in the pay run. Employee earnings don’t go into negative as the maximum amount deducted is equal to their net earnings.  


Preserved earnings, recurring deductions and the pay run

Now to clarify the meaning of my handy hint with examples of what happens in the pay run:-

Example 1: 

Preserved Earnings = $400;  Pay deduction up to preservation limit; Carry unpaid deduction amount forward

Example 2: 

Preserved Earnings = $0;  Do not pay the deduction; Carry unpaid deduction amount forward

Example 3: 

Preserved Earnings = $350; Pay deduction up to preservation limit; Don’t carry unpaid deduction amount forward

Let us know what you think! We’d love to hear your feedback or questions via comments or support@yourpayroll.com.au.

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