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:
- 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.