Configure Deductions

After creating a basic deduction definition, you must configure its parameters and deduction values.

To configure deductions:

1. Go to Payroll Setup > Earnings and Deductions.
2. Click the Deductions tab.
3. Select the deduction that you want to update.
4. Click the Parameters tab.
5. Select a calculation method in the Calculation Type drop-down list.
6. Select whether the deduction will be applied to earnings from all of an employee's associated legal entities, or just the primary legal entity, from the Apply from Normal Checks by Legal Entity drop-down list.
7. Define how the values involved in the calculation are specified from the Access drop-down list by selecting one of the following (Access isn’t available if you selected Expression in Calculation Type): 
   • Employee: Values are employee-specific and provided on each employee's record in People. For example, with the Calculation Type is Percent of then you need to specify the percentage value that the application uses to calculate the deduction on the records of every employee whose pay is deducted.
   • This configuration allows you to specify individual values for each employee; it is the most granular or specific method of providing deduction values.
   • Pay Group: Values are pay group-specific and provided in the Pay Group tab of the deduction definition; employee overrides cannot be provided, so the value specified for a pay group is used for all employees who belong to that pay group. For example, with Flat Amount selected for the Calculation Type, you need to specify the dollar amount deducted from the pay of employees in each pay group.
   • This configuration allows you to specify values for entire pay groups at a time; it is less granular than the Employee option but appropriate when the employees grouped in a single pay group never have different values deducted from their pay.
   • Pay Group or Employee Override: Values are pay group-specific but can be overridden per employee in People. You could specify a $500 flat amount deduction in a pay group as a default value, but then specify overrides of $650 for a few specific employees; for the employees with an override in People, the application uses the employee-specific value instead of their pay group's value.
   • This configuration allows you to specify common or default values for pay groups with the option of overriding the value for specific employees, as needed.
8. In Look Up Type, select the reference type that Dayforce uses to calculate the deduction. The Look Up Type field isn’t available if you had selected Flat Amount in the Calculation Type field.
9. In Look Up Value, select the earning, deduction, or group used to calculate the deduction. The options are based on the reference selected in Look Up Type.
10. Click Save.

After you save the deduction parameters, you define how the deduction is calculated by the application, but you still need to provide the values that are used in that calculation. For example, if a deduction is 10% of regular earnings, you finished defining that it is calculated as a percentage of regular earnings, but you need to provide the 10% value.