Deductions & custom earnings

This guide covers: create a deduction (pre-tax or post-tax), create a custom earning, assign to employees, and see results on payroll.

Create a deduction (pre-tax or post-tax)

What it does: Defines a reusable deduction type — 401(k), health insurance, HSA, dental, vision, union dues, loan repayments — that can be assigned to employees.

Where: Accountant dashboard → Deductions (/clients/[clientId]/deductions).

Steps:

1. Click Add Deduction in the top-right corner.
2. Pick a Category from the menu: 401(k) / Retirement · Health Insurance · Dental Insurance · Vision Insurance · Life Insurance · Disability Insurance · HSA · FSA · Garnishment · Child Support · Tax Levy · Union Dues · Loan Repayment · Other.
3. Enter the Name and a short Code (e.g., 401K, HEALTH).
4. Set Tax Treatment — Pre-tax or Post-tax. Pre-tax reduces taxable wages on Form W-2.
5. Pick a Calculation Method: Fixed Amount · % of Gross · % of Net · Per Hour.
6. Enter the Default Amount or Default Percent that will pre-fill on assigned employees.
7. Optional: set an Annual Limit (e.g., 401(k) IRS limit) and an Employer Match percentage with its own cap.
8. Click Create Deduction.

Who: Accountant or SMB owner.

Notes: Inactive deductions are hidden by default. Tick Show inactive at the top-right to see them all.

Create a custom earning

What it does: Defines an additional pay type beyond regular and overtime — shift differential, on-call, callback, tips, piece rate, mileage, allowance.

Where: Accountant dashboard → Earnings (/clients/[clientId]/earnings).

Steps:

1. Click Add Earning Type in the top-right corner.
2. Pick a Category: Shift Differential · On-Call Pay · Standby Pay · Callback Pay · Tips · Piece Rate · Mileage Reimbursement · Expense Reimbursement · Allowance · Other.
3. Enter the Name and a short Code.
4. Pick a Calculation Method: Fixed Amount · Per Hour · % of Gross · Per Unit.
5. Set the Default Amount that the engine will use unless overridden per pay run.
6. Click Create Earning Type.

Who: Accountant or SMB owner.

Notes: Mileage Reimbursement and Expense Reimbursement are typically non-taxable; pick those categories and the engine excludes them from gross-wages tax math.

Assign to employees

What it does: Attaches a deduction or earning to a specific employee so it runs on every payroll.

Where: Accountant dashboard → employee profile → Deductions / Earnings tab.

Steps:

1. Open the employee from /clients/[clientId]/employees.
2. Switch to the Deductions or Earnings tab.
3. Click Add and pick the company-level deduction or earning from the list.
4. Override the default amount or percent if this employee differs from the policy default.
5. Set a Start Date and an optional End Date. The engine only applies the line within that window.

Who: Accountant or SMB owner.

Notes: Court-ordered garnishments live on a separate page — see Garnishments. Health and dental deductions that need ACA tracking should pair with ACA tracking.

See on payroll

What it does: Confirms deductions and earnings landed correctly on the next payroll run.

Where: Accountant dashboard → Payroll Runs → run review.

Steps:

1. Open a draft or completed payroll run.
2. Each employee row shows: Gross · Earnings (broken out by type) · Pre-tax deductions · Tax withholdings · Post-tax deductions · Net.
3. Click an employee row to see the per-line breakdown, including which deduction code drove each line.
4. Cross-check the Deductions report at /clients/[clientId]/reports/deductions for a YTD roll-up across employees.

Who: Accountant or SMB owner.

Notes: If a deduction does not appear on payroll, confirm the assignment's start date is on or before the pay date and that the parent deduction is still marked active.

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Related: Garnishments · ACA tracking · Standard payroll reports.