A Reducing Balance is used to deduct a sum from an employee. For example, you may grant an employee a loan of $2,000 to be paid in four instalments of $500. Later, you may retrieve the amount in the same manner. A Reducing Balance can be applied to any Deduction code that is set up as an Amount or Percent type.
Set up the Reducing Balance Deduction
To set up for a Deduction After Tax, for example;
Go to Payroll, Maintenance, General, Additions and Deductions.
Click Add to add a new record.
Enter a unique Code, shortcut key, and Description.
Select Deduction After Tax in the dropdown next to Category.
Select Amount in the dropdown next to Type. Leave the Amount field blank, as this can be set on the Employee's Record and used for multiple employees at any time.
In the Other area, tick the Reducing Balance checkbox.
Click OK to save the record.
Link to the Employee Record
Go to Payroll, Maintenance, Employees, Employees.
Open the relevant Employee Record.
Click on the Additions and Deductions tab.
Select Add to add the addition or deduction.
Select the relevant Code.
Untick the Use Default checkbox. The Use Default option is ticked by default. This option uses the value created in the Additions and Deductions Maintenance. If no value is set in Maintenance, you must untick this option.
Enter the Amount per Pay that is to be paid or deducted from the employee for each pay.
Enter the total amount to be paid or deducted.
If the final instalment is less than the Amount per Pay, only the remaining balance is deducted. The Employee will be able to see the balance of the Deduction on their Pay Advice.