Examples of Custom Pay Types
      Back to home
      1. Help Centre
      2. Employee Settings
      3. Examples of Custom Pay Types

      Creating a Non-taxable Deduction Custom Pay Type for Union Fees - an Employee-Authorised Deduction

      This example shows how to set up an employee-authorised custom pay type for an after-tax union fees deduction.

      Updated: October 2024

      Your employee has joined a union and requested in writing that you deduct their fees from each pay. Their fees translate to $9.50 per pay. Let's break down this deduction example.

      This deduction is:

       ❌  A regular payment I can use system pre-loaded pay types for.
       ✅ I prefer using a custom pay type for clarity on the payslip or/and reporting and tracking purposes.
       ✅  This is a non-taxable deduction, meaning after income tax has been calculated. 

      The custom pay type & timesheet should have the following:

       ✅  Custom pay type created in the non-taxable section
       ✅ Rate: -1 (deduction rate is negative)| Per: unit
       ✅ Amount entered on timesheet as agreed

      Here is an example setup:

      S12CPT_UnionFeesDeduction

      • Create this custom pay type with a recognisable name in the Employee Profile - Pay Types tab and SAVE.
      • Select your recognisable pay type from the dropdown timesheet list.
      • Enter the amount on the agreed day.
      • The timesheet summary displays all non-taxable deductions together as one combined figure.

      Further Resources