Step 6. Set Up Deductions and Contributions (Optional)
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What are Deductions and Contributions? |
| A Deduction is an amount that reduces an employee's gross pay for something other than statutory deductions.
Most deductions are ‘post-tax,’ which means that they have no effect on the calculation of statutory deductions. An example would be a coffee or social club deduction.
Other deductions may be ‘pre-tax,’ meaning that the amount deducted reduces the employee’s taxable income. An example of a pre-tax deduction could be an RRSP.
A Contribution is an amount that the employer pays on behalf of the employee. An example might be an amount the company pays towards the employee's pension plan or group insurance plan.
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Why do I have to do this? |
| When you set up your company-level data, you created cycles which dictate which deductions and contributions that are to be applied to specific payroll runs. The data entered on this screen tells Powerpay how much money should be taken for deductions and/or the amounts of employer contributions for each employee.You can set up permanent amounts on this screen and/or one-time only amounts by using the This Pay Only column.
(Note: Any This Pay Only amount must be a Dollar amount.)
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