What are Deduction Types and How to Configure Them

What are Deduction Types and How to Configure Them

Payroll deductions are wages withheld from an employee's total earnings for the purpose of paying taxes and benefits, like health insurance.

In this area, you’re able to create custom Deduction Types that can be used for all employees. 

To create a new Deduction Type:
  1. Select the “Payroll” tab in the top navigation menu. 
  2. Select the “Settings” tab in the secondary navigation menu. 
  3. Select “Deduction Types” from the left side menu. 

  4. Review the existing library of Deduction Types to ensure the new type is not a duplicate.
  5. Enter a “Code” and “Name” for the new deduction type, then determine if the new deduction type is a pre-tax deduction by marking the "Pre-Tax" checkbox. For example, a 401-K deduction may have the code of “401K” and a name of “401-K Deduction.”
  6. Select “Add.”

  7. Existing deductions can be edited or removed from the action gear beside each type.
  8. Note: Adding or removing deduction types will not affect any currently open payroll runs.


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