When you're a company that runs payroll, you can run into situations where you need to add or subtract funds from an employee's paycheck, for reasons other than just their base pay and taxes. Some examples of this include Loan Reimbursements, Income Withholding Orders, Health Insurance payments, 401k's, or allowances for expenses such as gasoline or hotels.

Fingercheck offers a robust array of options to enable these schedule-able Deductions and Reimbursements by way of the "Deductions" module. Deductions can be customized by going to Setup > Payroll > Deductions, and can be even further customized on an employee-by-employee basis by going to the employee's personal Deductions page, which can be accessed by going to Payroll > Deductions inside the employee's file.

Read further to find out more about what tools are available, and how they might apply to scenarios you could encounter in your business operations!

Setting up a Deduction Code

To create a fully functional Deduction Code in Fingercheck, begin by going to Setup > Payroll > Deductions, and click the blue "Add" button.

Upon clicking the "Add" button, you'll get asked if you want to add a pre-defined Deduction. These pre-made templates are designed to make creating Deduction Codes easy, and include a lot of common applications, such as those for Reimbursements, 401k's, Benefits (Medical/Dental/etc), and more. Check to see if the kind of Deduction Code you want to create is already there.

If none of the pre-defined templates suit your needs, click the green "Add Custom" button to continue on to create a new Deduction Code.

On the screen that follows, you'll be asked to enter information into some fields. These fields are:

  • Code: This is a short, unique code, usually just a few letters or numbers long, to help identify the deduction when displayed in other areas of Fingercheck.

  • Short Description: This field corresponds to certain Quickbooks Online and ZenPayroll/Gusto configurations. If you do not use either of those platforms or are unsure of what to enter in this field, simply copy the value from the Code field above.

  • Description: This is a longer, more proper name, usually used in combination with the Code to help identify the deduction when displayed in other areas of Fingercheck.

  • W2 Box 14 Label: This field is used if the deduction should appear in Box 14 of the W-2 form of any employee paying into this Deduction code.

  • Tax Type: This dropdown list indicates what kind of general rules should be used when calculating the deduction.
    Examples include Pre-Tax, Post-Tax, 401k, HSA, etc.

  • Calculation Rule: This dropdown list dictates what logic is used when calculating, such as whether to expect a flat amount, a percentage value, or various other options.

  • Based On: This dropdown list is used to fine-tune what value should be used when calculating the deduction.

  • Accumulator Base On: This field is used in conjunction with an Accumulator that has been set up on your Fingercheck company to tell the deduction to follow the Accumulator rules.
    (Accumulator rules can be created by going to Setup > Payroll > Accumulators)

  • Disposable Wage Limit: Use this dropdown if your deduction has a limitation of how much of an employee's paycheck can be used.
    (Typically this is used with Income Withholding Orders/Child Support.)

  • Prorated Lien: Check this checkbox to prorate a lien based on disposable wages.

  • Rate: Enter a rate (if using the "Percent" Calculation Rule) to use for all employees this deduction is applied to.

  • Amount: Enter an amount (if using the "Flat" Calculation Rule) to use for all employees this deduction is applied to.

  • Maximum Type: Use this in conjunction with the Maximum Amount field below it to set a maximum limit of funds that can be taken over a period. The deduction stops processing if the limit is reached within the specified period.

  • Maximum Amount: Use this in conjunction with the Maximum Type field above it to set a maximum limit of funds that can be taken over a period. The deduction stops processing if the limit is reached within the specified period.

  • Process Sequence: Enter a number into this field to determine the priority this deduction should have over other deductions when processing.
    (Lower numbers = higher priority!)

  • Display Sequence: Enter a number into this field to determine the priority this deduction should have over other deductions when displayed on paystubs.
    (Lower numbers = higher priority!)

  • Frequency: Set this field to tell the system which Frequency rule should be used for this deduction, which dictates how often the deduction should trigger if it's applied to an employee's file. This field is required, even if there is no need for a schedule to adhere to.
    (Frequency Rules can be created by going to Setup > Payroll > Frequencies)

  • Trigger Other Deduction: This field can be used to automatically cause another Deduction Code to be applied any time this one is applied.

  • Payee: Set this field to tell the system which Payee profile should be used for this deduction. These are typically used for Child Support or Collections agencies.
    (For more information on Payees, click here.)

  • Block on Additional Check: Check this box to ensure that the deduction is not taken from Manual Checks or Special Payroll checks unless entered in manually.

  • Allow Partial Amounts: Check this box if an amount less than the most possible amount is allowed.

  • Calculate Only: Check this box if the deduction should only be used for calculation purposes, and should not actually deduct or reimburse any monies to the employee.

  • Force to Negative Amount: Check this box to make all amounts negative (meaning it gives money to the employee instead of taking it away).
    Typically this is used for reimbursement codes since they are essentially always going to be a "negative deduction".

  • Exempt from Workers Comp: Check this box if amounts deducted should not be considered for Workers Comp calculations.

Now that you know what all of these fields do, and can create your own Deductions in Fingercheck, how do you use them on Employees?

Applying a Deduction Code

There are two basic ways in which a Deduction Code can be used- manually or automatically. Here's what you need to know about each.

Manual Application

A manual application of a deduction is when a deduction code is applied to an employee's individual check (Note this can be done on Manual Checks or checks automatically created during Payroll runs).

To do so, follow these step-by-step instructions.

  • Create your Manual Check (or edit a check, in Step 4 of the Payroll process), and on the Check Detail screen, under the Earnings tab, add a line for the Gross Amount the employee should earn on that check (if one is not already there).

  • Click over to the Deductions tab, and click the blue Add button to add a line.

  • In the first field, select the Deduction Code you created from the list.

  • In the second field, enter the amount to be deducted.

  • Continue processing the check as normal.

Automatic/Scheduled Application

An automatic deduction is one that follows a certain "schedule" and is set up on the employee's file. Once done correctly, the deduction is applied automatically based on the parameters set without any further input needed.

To set one up, follow these step-by-step instructions.

  • Open an employee's file by going to the Employees module and clicking the name or Employee Number of the employee.

  • Navigate to the employee's Payroll > Deductions area, and click the blue Add button.

  • Select the Deduction Code you created for the Deduction Type field.

  • Enter an Amount or Rate.
    (If one is not already set up on the Deduction Code itself.)

  • Set a Start and End Date to tell the system when to start and stop applying the deduction automatically.
    (Use 12/31/2099 or a similar value for the End Date if the Deduction Code should be applied indefinitely.)

  • Set a Goal Amount if the Deduction Code should stop applying once a particular amount of money has been collected.
    (This is useful for loan repayments and some Child Support configurations.)

  • Set a Payee and Payee Reference Code if an Agency Check should be prepared.
    (This is useful in Child Support and Wage Garnishments since there is usually a collections agency involved that payments should be sent to.)

Save your work, and you're done! On future payroll runs, you'll see the deduction you set up applied automatically.

If you have any questions about how to set up a Deduction Code, feel free to reach out to our team at 1-800-610-9501, or, use our in-app messaging feature, located at the bottom-right of the screen, while you're logged in to Fingercheck.

To learn more about our cost-effective and user-friendly cloud-based time and attendance software, check out our website at Fingercheck.com. Interested in our services? Sign up for a 30-day free trial and get started with Fingercheck today.

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