Balances and Arrears

You can add and manage arrears and balance records for deductions in the Arrears and Balances section at the bottom of the Payroll > Payroll Elections screen.

Balances

Dayforce can track loan balances and automatically deduct payments from an employee’s earnings until the balance is fully paid off. These declining balance deductions are usually used for interest-free loans for computers or other equipment. Tracking these types of deductions involve entering the initial balance of the amount, and entering a repayment schedule that is followed until the amount is paid off.

When you add the balance that the employee owes, you need to configure how the employee pays off the loan by creating a payroll election. This election determines how often the deduction is applied and how much is deducted. For example, to repay a computer loan, you add a deduction election to collect $35 every pay day until the loan is paid back. When the loan's balance is zero, Dayforce stops applying the deduction.

Important: To create a balance for a deduction, the deduction code must have the Declining Balance checkbox selected in the Options subtab of the Deductions tab in Payroll Setup > Earnings and Deductions.

When a scheduled amount is deducted from an employee's pay in Payroll, Dayforce automatically adds a transaction to the balance record and updates the current balance in the Balances tab in the Arrears and Balances section of the Payroll Elections screen.

In the screenshot below, a $35 transaction is added to the Computer Loan deduction. The System Generated column shows Yes, indicating Dayforce added it automatically.

You can also manually add transactions for payments made by employees separate from the normal payroll process, without automatic deductions from an employee’s earnings.

Employees often use separate checks to repay loans or missed deductions that have gone into arrears, with funds coming directly from their bank accounts, not Payroll. As a result, you need to enter these payments so that Dayforce reduces the amount of the outstanding loan or arrears balance.

For example, an employee's deduction goes into arrears by $500 and they have an additional $250 in earnings in their next paycheck. Dayforce automatically deducts the additional $250 and applies it to the arrears balance. The new balance is $250.

The employee writes a check for $200 and gives it to the payroll department. A payroll administrator enters the transaction in the Arrears tab, which reduces the arrears balance to $50. On the next pay day, Dayforce only deducts $50 to cover the arrears balance.

Instead of defining a payroll election, you can also enter payments made towards declining balances, such as loans. These payments can be extra loan repayments or the only repayments when Dayforce isn't configured to deduct them automatically from earnings.

For example, if an employee has six months to pay off a loan with no specified repayment schedule, you can enter the repayment amounts as the employee provides them.

Arrears Records

A similar process as described above for balances can be used for deduction amounts that have gone into arrears.

When a scheduled deduction payment is missed due to insufficient funds on a paycheck, Dayforce automatically adds an arrears record to the Payroll Elections screen. Dayforce automatically deducts from employee earnings until the loan or arrears balance is paid off.

Note: A deduction can only enter arrears when it has the Allow Arrears checkbox selected in the General subtab of the Deductions tab in Payroll Setup > Earnings and Deductions.

In this example, Dayforce is unable to collect a scheduled amount of $75 in Payroll, so it automatically adds the following to the Arrears tab in the Payroll Elections screen:

1. An arrears record for the deduction.
2. A balance transaction of $75 to this arrears record.

Just like balances, you can manually add an arrears record in the Arrears tab. Additionally, you can create transactions in individual arrears records to adjust the arrears as needed.

Note: It's also possible to create an arrears balance through the Quick Entry tab of Payroll by creating a payroll entry that has the Debit Arrears checkbox selected. See Impromptu Arrears for Manual Deduction Entries.

Add Balances or Arrears Records

To add a balance or arrears record:

1. Go to People, open the employee profile, and click Payroll > Payroll Elections.
2. In the Arrears and Balances section at the bottom of the screen, click the Arrears tab or the Balances tab.
3. Click Add.
4. Select an option in the Code drop-down list and enter a description.
5. Do one of the following:
   • If you're creating a balance record, change the effective start date as needed. The default is set to the current date.
   • If you're creating an arrears record, change the date of the first arrears as needed. The default is set to the current date.
6. For balances only, enter the beginning balance amount. This field isn’t available for arrears. Dayforce calculates the balance for arrears based on the individual transactions in that arrears record.
7. Click Save.

Manually Add Balance or Arrears Transactions

To add a transaction to a balance or arrears record:

1. Go to People, open the employee profile, and click Payroll > Payroll Elections.
2. In the Arrears and Balances section at the bottom of the screen, click the Arrears tab or the Balances tab.
3. Select an arrears or balance record from the list, and click Add in the Transaction section at the bottom of the screen.
4. In the Delta field, enter a negative value to decrease the arrears or balance and a positive value to increase the arrears or balance.
5. (Optional) Update the transaction date, which is set to the current date by default.
6. Click Save.