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.
Click on “New” and define the rows for this new deduction.
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.
When the “Calculate Gross” function is completed, the Payroll Worksheet now shows the deduction for the employee.
Step 2: Percentage of Gross Pay
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.
To set up the Custom Calculation, click on “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
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.