In certain situations, especially for hourly paid employees, occasionally their paycheck is not enough to cover their voluntary deductions (e.g. health deductions premiums) or they are not paid due to no working hours in the pay period. Whenever such situations arise, their deductions need to be tracked so that the same can be applied in the future pay period.
Uzio payroll system now has the capability to not only track such arrears amounts but also automatically apply them when an employee earns sufficient wages in any future pay periods. This will eliminate the dependency to track arrears amount manually.
How to setup arrears tracking for deductions
In order to set up arrears calculation for any deduction, the following steps need to be performed:
- Go to company level deduction setup
- Select “Yes” to the arrear tracking setup.
- You can also decide if the arrears amount needs to be included in full or in parts in the future payrolls from the Arrears Processing Method field.
- There are three Arrears Processing Method to be setup in the system
- Total Amount - All the available arrears balance will be included in the next payroll.
- Fixed $ - A fixed amount of the available arrears balance will be included in the next payroll.
- None - No amount will be included in the next payroll. This is useful if you only want to track the arrears balance but do not want to process them.
- Once the deduction is assigned to the employee, any arrears amount calculated by the system can be reviewed and changed from the employee deduction setup.
- Arrears Processing Method can also be overridden for specific employees.
- You can also download the Assigned Deduction and Deduction History reports to check the arrears balance of all the employees.
Company Level Deduction Setup
Employee Level Deduction Setup
Note: If you are using the Arrears tracking for any deduction, please ensure that the fields like Total Amount Owed (should be kept blank) or Annual Maximum is not used as it may lead to incorrect arrears amount processing.