The purpose of this article is to provide the Payroll Processor with information on how to set up a deduction for a Garnishment in Canadian Payroll.

Typically, there are three main types of Garnishments.

  • Fixed Amount
  • Percentage of Gross Pay
  • Percentage of Net Pay

Step 1: Fixed Amount

Navigate to the Payroll Worksheet from the Role Tailored Client page, Payroll > Process Payroll > Payroll Worksheet.

Then to the Deduction Setup Icon on the Actions Tab.

Payroll Worksheet Navigation Pane

Click on “New” and define the rows for this new deduction.

Garnishment Setup

Enter the fixed amount in the “Employee Custom Calc Amount”,

In the “Applied To” column change the default setting from “Everybody” to “Specific Employee”

In the “Applies to Reference”, using the search function, enter the Employee Number,

Close the screen when completed.

Deductions

When the “Calculate Gross” function is completed, the Payroll Worksheet now shows the deduction for the employee.

Step 2: Percentage of Gross Pay

Deductions

Use the same procedure as in the Fixed Amount, however, in the “Employee Calc. No” indicate the Calculation of “GARNPERGROSS”. – create new if not already set up,

In the “Applied To” column change the default setting from “Everybody” to “Specific Employee”,

In the “Applies to Reference”, using the search function, enter the Employee Number. In this example, we have chosen employee Peter Saddow.

Deductions Setup

To set up the Custom Calculation, click on “All Calculations”.

All Calculations

Click on “New” to create the calculation.

The custom calculation shown above is for 20% of Gross Pay.

When the function of “Calculate Gross” is completed, the new deduction is shown in the Payroll Worksheet

Employee Deduction
Deductions Fact Box

Step 3: Percentage of Net Pay

The system cannot create a calculation for a  percentage of Net Pay at this time.

The process to complete this would be as follows:

  • Complete the function of Calculate Taxes
  • Complete a calculation for the Garnishment based on the Net Pay created in the step above
  • Add the Garnishment amount using the Deductions icon in the Action Tab
  • Complete Payroll

Continue with the Payroll Process.