When configuring deduction codes to calculate on additions, it’s essential to ensure the correct settings are applied to both the deduction and addition.
This functionality applies when:
The deduction has:
Type set to Percentage
Category set to Deduction Before Tax or Deduction After Tax
The deduction will apply its percentage to all additions and deductions that have the Include in Deduction Calculation checkbox ticked.
Configure the Deduction
Go to Payroll, Maintenance, General, Additions and Deductions.
Edit the Deduction.
Tick Process Deduction Calculation. This setting allows the deduction to calculate a percentage based on applicable additions and deductions.
Click OK.
Configure the Addition
Go to Payroll, Maintenance, General, Additions and Deductions.
Edit the Addition.
Tick Include in Deduction Calculation. This setting ensures the addition is included in the base amount used for calculating the deduction.
Click OK.