Company and Employee Level Deduction Setup

Instruction on how to set up deductions on the company and employee levels.

OVERVIEW

Payroll deductions are wages withheld from an employee's total earnings for the purpose of paying for benefits, garnishments and other items. Taxes are also deducted from employee pay, but those are not managed through Deductions in Namely - they're withheld by the system based on the tax jurisdictions an employee lives and works in. This article explains how to set up deductions in Namely on both the Company and Employee level.

CREATING DEDUCTION ON A COMPANY LEVEL

Deductions must be set up on the Company level before they can be used on the employee level. To set up a payroll deduction at the company level:

1. On the Namely homepage, click Manage Payroll.

2. In Namely Payroll, click Company > Deductions.

Add a Company-Level Deduction

The fields displayed on the Company Deductions page are dynamic—meaning you’ll only see fields relevant to the specific type of deduction you are adding.

To add a deduction:

1. Click Add deduction.

2. Select the Deduction Type from the dropdown menu. Please be sure to choose the correct Deduction Type when setting up your deduction code. 

   • Note: The Deduction Type determines how the deduction code is mapped and where the deduction amounts appears on an employee's W-2.

3. Enter the deduction Name. 

   • The deduction Name will display on your employees’ pay stubs.

4. Enter the deduction Code. 

   • The deduction Code is internal for your organization.

5. Enter the Start Date for the deduction.

   • The deduction Start Date is typically the date that you’re creating the deduction.

Depending on the deduction type, additional fields could include:

• Automated Proration—Turn on to prorate deduction amounts in any applicable pay cycles.

• Paid By—Who contributes to this deduction, the employee, employer, or both.

• Employer Sponsored Health Coverage—Whether the deduction impacts box 12 on W-2.

• Do you want Namely to remit payments?—Whether Namely should remit payment for this deduction on the employee's behalf.

  • If selected, fields for required payee information will display.

• Employee and Employer Costs—Depending on who contributes to the deduction, you can set company-level per-pay period costs, maximums, and annual maximums.

• Excluded earnings and imputed income—Select whether any earnings should be excluded from the deduction, or whether imputed income should be included or excluded.

Click Save after making your selections.

 

Edit a Company-Level Deduction 

To edit a deduction:

1. Click Edit next to the deduction.

2. Change any fields you want in the deduction.

3. Click Save. 

TIP:

You can change any field in the deduction except for the Deduction Type. To change a Deduction Type, you should end date the existing deduction and build a new one with the correct Deduction Type.

 

CREATING DEDUCTIONS ON AN EMPLOYEE LEVEL

To add the deduction on the employee profile, you will need to create a deduction that is specific to that employee.

Add an Employee-Level Deduction

To add a deduction:

1. On the employee's Deduction page, click Add Deduction.

2. Select the appropriate Deduction Type from the Company Deduction dropdown.

3. Enter a Start Date for the employee’s deduction.

4. Enter any associated Employee or Employer costs if they differ from what is at the company level.

5. Enter any required Payee information.

Editing Deductions

Once the deduction is created, you may edit it at any time by going to their Deductions page and clicking Edit next to the deduction.

You can also choose to end date the deduction and add a new deduction if you'd like to maintain a record of the deduction on the employee's profile. 

Continuing Balances

If you are assigning a continuing deduction type (i.e., you don't want the balance paid to reset annually), enter the remaining balance that needs to be paid on the deduction under the Starting Balance field. For more information, see Continuing Deduction Caps.