How to Process School Fee Deductions

Employees who have students at the school may be allowed to pay their parent accounts as payroll deductions.

This section details an example of an employee with a $2500 parent account balance that they are paying off as fortnightly pay deductions of $500.

Create a paycode for 'School Fee Deductions' using program Payroll > Setup Information > Payroll Setup on the 'Paycodes' tab.

Paycode Number	Normally a code in the 500 - 599 range
Group	Deductions
Description	School Fee Deduction
Abbreviation	A shortened description – maximum 10 characters
Tax Equation Flag	A – After Tax Deduction
Multiplier	This should be -1.
Tax at Marginal Rate	Unchecked
Rate Code	For this type of paycode you need to select: '0 = Rate Amount is manually entered'
General Ledger Account	Use a payroll deduction liability account. It would be a good idea to have a separate GL account for school fees deductions.
Timesheet Entry Allowed	Checked

Paycode Parameter Options

Fields that require further explanation:
Print on Pay Envelopes	Checked
Included on Superannuation Gross	Unchecked
Accrue Leave on Hours/Days Paid	Unchecked
Attracts Annual Leave Loading	Unchecked
Request History Details	Unchecked
Banking Deduction	Unchecked
Include Hours/Days in Review Trigger	Unchecked
Apply Exception Checking	Unchecked
PAYG Payment Summary Options	Leave all of the fields in this section of the screen fields blank.

2. Enter the deduction against the employee using program Payroll > Employee Information > Employees on the 'Permanent Pays' tab.

Employee deduction that is to occur until a zero balance is achieved (School Fees Deduction)
Paycode/Desc	Use the deduction pay code setup for 'School Fees Deduction'.
Hours/Units	1
Rate Code	0 = rate is manually entered
Position	Blank
Rate Amount	500.00 (being the amount that is to be deducted each pay run)
GL Account	Use the default. This will ensure that the GL Account that is setup in Step 1 above is used.
Period End Date	Blank
Balance Due	$2500 being the total amount that will be deducted through the payroll
Periods	The system will calculate this based on 'Balance Due' divided by 'Rate Amount'.
Member Number	Enter their Parent Account Code.

The result of processing this deduction through a pay run will be:

The GL transaction produced:

	DR	CR
Employee Wages Expense Account	$500
School Fees Deduction Liability Account		$500

The deduction will continue until the $2500 balance has reduced to zero. At the end of each pay run, the Balance Due is automatically reduced by $500 and the remaining periods are recalculated.

4. Create a Fee Code called 'Payroll School Fee Deduc' using program Parent Accounts > Setup Information > Parent Accounts on the 'Fees' tab. This should be a 'Credit' type and use the same GL account code as setup in Step 1.

Process the deduction as a credit against the parent account using program Parent Accounts > Charges and Credits > Charges and Credits.

The GL transaction that will be produced:

	DR	CR
School Fees Deduction Liability Account	$500
Accounts Receivable Control		$500

Tip! The process of raising the credits could be done as a month-end procedure. Use the 'Deduction Summary Report' option that is available in program Payroll > Listings & Reports > Pay Run Report (during the monthly pay run) to provide the details for this step. This report will include the Parent Account code that was entered in the 'Member Number' field in step 3.