Apply a deduction to an employee

Deductions Process

Deductions can be applied to an employee's pay as needed.

Some examples of deductions might be:

  • Adding child support deductions
  • Processing an overpayment

The process that you follow when applying a deduction will depend on whether or not the deduction is being applied before or after payroll has been processed.

To apply you'll need to:

  1. Have the deduction set up in your foundU platform as a Deduction type in Payroll Settings > Deductions. 
  2. Apply the deduction to the employee on their profile e.g. (one off/split over multiple pays/reoccurring).
  3. Or If timesheets have already been generated you can apply the deduction to the employee's payslip directly.
  4. Run deduction reports on unprocessed and processed deductions.
Set up the deduction type in your foundU platform

In order to add a deduction to a payslip, you'll first need to set up a Deduction Type. This type will then be able to be selected from the drop down menu in payslips.

To set up (add) a deduction type:

  1. In the quick menu select the hamburger icon to open the full menu and select Payroll Settings > Deductions.
  2. Select Add New Deduction
    • Name the deduction.
    • Value Type e.g. dollar value or percentage.
    • Deduct from e.g. Gross Wage or Net Wage.
    • Deduction Type e.g. Fees or Workplace Giving. These type are used for Single Touch Payroll (STP) ATO reporting purposes.
    • Pay to Another Account leave as no if you do not wish to pay out to another account.
      • Candidate Managed select if the employee should have the ability to set up their own deduction in their own portal.
      • Disable select if you would like to disable this deduction from use on the platform including:
        • In the Employee Portal- employee can no longer select this deduction type through their Employee portal.
        • In Payslips- the deduction type will not show on payslip edits/adjustments.
        • Past Payslips- any processed deductions (on past payslips) will display as greyed out if trying to edit.
        • Any existing reoccurring deductions will also be turned off.
          • The date for reoccurring deductions may not be adjusted in the employees profile (ensure to adjust this if disabling this deduction type).
          • Note: If you disable this deduction type and decide to re enable it, you will need to set up re-occurring deductions.
  3.   Save.

To edit an existing deduction:

  1. Click the pencil icon to edit a deduction type.
  2. Make the required changes.
  3. Click Save.


To be able to apply deductions to employees, you need to have the deduction type set up. To set your deduction types and add new deductions:

  1. Go to the full menu (hamburger icon), Payroll Settings, then click Deductions.
  2. This will display your current deduction types. You can click Edit to update an existing, or Add Deductions to add a new type.
  3. Enter the deduction type Name. This will be the label shown on payslips.
  4. Select the Value Type for the deduction: $ or %. This number cannot be a decimal. Please consider rounding up to the nearest dollar.
  5. Select if the value type is to come off the Gross Wage or Net Wage amount.
  6. Select Yes or No to Pay to Another Account. Leave as No if you do not wish to pay out to another account. Please note: This cannot be added if the timesheet/pay has already been generated for the employee.
  7. Tick 'Candidate Managed' if the employee should have the ability to set up their own deduction in their employee portal.
    • Note: The employee will only see deductions in their Employee profile if they have a deduction type assigned.
  8. Click Save.
    • The deduction type is now saved and can now be applied as needed.


Applying a deduction in the Employee's profile 

This type of deduction can only be done before pay has been generated. The benefits of using this method are:

  • The deduction can be paid directly into a 3rd party bank account (ie. child support)
  • The amount can be split into manageable per cycle amounts
  • It can be set as a reoccurring amount
  • Can be done before pay has been run

Setting a deduction type and amount in an employee's profile

Follow these steps if payroll hasn't yet been run.

You can set up the following 3 types of deductions on an employee's profile:

  1. Go to People, Approved People. Find the employee and click on their name to go to their profile.
  2. Click on the Financial tab.
  3. Select the Deductions section> select Add Deduction.
  4. Select the frequency of the deduction type.
    • One -off deduction
    • Recurring deduction till a $$ amount is reached
    • Recurring deduction with/without time limit
  5. Complete the deduction details:
    • Type = e.g. Overpayment, Child Support etc. 

    • Total Amount = The total amount that needs to be deducted from the employee. Please remember that if per paycycle amount is NOT defined then it will simply take this total amount each time a paycycle is generated for the employee. If a per paycycle amount is defined, then this amount value is the total that needs to be paid off over a period of time until the amount reaches $0.00.
      (** If your deduction has an amount and a per cycle amount entered- It is important that you ensure this amount is not a decimal. (I.e. instead of using 125.22 as an amount, round to $125)

    • Threshold Amount = The threshold amount of gross earnings that must be earned before the deduction can be taken.
    • Reference- the reason for the reference, i.e. Overpaid on 02-11-21
    • Amount per payslip = This is the instalment amount to be deducted from each payslip. *If you would simply like an ongoing deduction to occur do not enter a value here.

    • Threshold Amount = The threshold amount of gross earnings that must be earned before the deduction can be taken.

    • Start From = Select the first period ending you would like this to start.

  6. Click Add Deduction.

Please note: If the deduction is applied after timesheets have been generated it will not go through to paycycle. In this case the deduction needs to be added in paycycle. Or you can reprocess the paycycle/draft payslip.



For example: Rosalee has been overpaid 512.34 on 07-12-21, so we are going to setup a deduction to recoup the funds.

  • We choose a recurring $$ deduction or $75
  • This deduction will only take place in pay-cycles when Rosalee earns her minimum threshold amount of 125.00
  • This will start on 18- Jul -2021


Please note: If you attempt to change the STP reporting portion of a deduction the below pop up box will appear. Your current financial data will always update. The checkbox will only appear in the first 14 days of the financial year as an option to update the previous year (this is the time you have to change and finalise STP data with ATO).



Applying a deduction to a payslip 

You can use this method to apply a deduction before or after pay has been run by editing a payslip. 

    1. Navigate to Payroll > Pay.
    2. Find the employees Draft Payslip and click Actions, Edit. 
    3. Click Add Deductions. A deductions section will appear below. Enter the % or $ amount based on the deduction type.
    4. Click Calculate Totals and Preview PDF to check everything is correct.
    5. Click Update Payslip. 
    6. Enter a reason for your update and click Save Changes.
    7. The deduction will be applied when payslips are generated.


  • Please note that if the deduction is to be paid into another account. This account will need to be added on the employee's profile first. Please use whole numbers ( i.e. 123.00 instead of 122.50). Additionally that another account will not appear for manual payslips.

Applying deductions to payslips in bulk

The Bulk deductions import allows the user to update deduction amounts in bulk from the Pay page. For example, this CSV Import can be used to: 

  • Manage large amounts of fluctuating deduction amounts that are applied every week (in bulk). 
  • Also be able to remove existing deductions on draft payslips or add new deductions.
  • Allows user to add “pay to other account” deductions manually to a payslip.

For more information on using the Bulk Deductions Import please read this article.

Reporting on deductions (processed and unprocessed)

Some examples of deductions reports may be:

  • Child support report

It may be helpful to generate a Deductions report to view all your deductions in a certain time period some common deduction types may be uniform, equipment deductions, rent deduction, overpayment deductions (where applicable).

There are two key deduction reports that can assist which are located in the quick menu Reports > Financial > Payroll Reports section

  • Processed Deductions- processed payroll deductions.
  • Unprocessed Deductions- pending payroll deductions.

Processed Deductions Report

  • Select the Duration (date range) and Optional Group by options (you can have multiple grouping options by clicking the Add Grouping button).
  • Additional Filter options include filtering by:
    • Specific Employees
    • Operations/ Venues
    • Office Codes
    • Specific Deductions e.g. types
    • Batch (if applicable)
    • Cash Basis (if applicable select the tick box)
  • Click Submit to run the report.


Unprocessed Deductions Report

It may be helpful to generate a Unprocessed deductions report to view any outstanding or pending deductions yet to be processed.

  • You can run the report to see all Deductions or select optional Filter options to filter by:
    • Employee/s
    • Office Codes
    • Specific Deductions

Why is my deduction not showing?
If you've set up your deduction type and the deduction for the employee and your deduction is still not showing up on your employee's payslips, you can check the below sections:
  • If you have added a deduction to a accepted timesheet, have you reprocessed that payslip via selecting the draft payslip > Bulk actions > Reprocesses selected paycycle.
  • Is the deduction to be paid into another account? If so this account will need to be added on the employee's profile first. Please note that another account will not appear for manual payslips.
  • Deductions paid to another account cannot be paid retrospectively (i.e. added to a previous pay adjustment of the past pay period).
  • Please note that once a deduction is processed it cannot be removed from the original i.e. cannot reverse deductions.
  • If you have your deduction type showing on your edit payslip/ or create adjustment and you enter in an amount, if you don't see the deduction on your payslip preview ensure to check:
    • The total amount of the payslip e.g. $200
    • Compare that amount with the deduction in the employees profile (and check if there is a threshold amount) if the payslip is less than the threshold the deduction will not flow though (which is correct). E.g. threshold is $300 (the deduction will only trigger if the gross amount is greater than this figure).
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