Deductions and Expenses

Use Expenses and Deductions to automatically add pre-tax expenses or post-tax deductions to selected employees' payslips when payroll is processed. Choosing the correct type matters: an Expense is applied before tax, while a Deduction is taken from after-tax pay, so the rule is calculated and reported correctly.

Navigate to Menu > Settings > Payroll Rules > Deductions Rules.

The page lists your rules on the Expenses and Deductions tabs. Click the pencil to change a rule, Clone to copy it, or Delete to remove it.

Choose between an expense and a deduction

Use the rule type that matches the payment.

• Child Support classifications are for Deductions.
• Fringe Benefit classifications are for Expenses.
• The percentage options Gross Taxable and After Tax are available for Deductions only.

Add an expense or deduction rule

1. Open the correct tab and click Add New Expense Rule or Add New Deduction Rule.
2. Optionally select a template under Rule Templates: Super Sal Sac on the Expenses tab, or Child Support, Union Fees or Charity on the Deductions tab. Templates only fill in example values, so check every field before saving.
3. Complete the rule fields below.
4. Click Add Rule. When editing an existing rule, the button is Update Rule.

Expense and deduction rule fields

A Fixed rule is recalculated for each payrun. The payroll engine applies the account's pay frequency, so check the amount on a sample payrun before processing payroll.

Percentage calculation bases

When Percentage is selected, choose the base that the percentage should use:

The saved rule table abbreviates these options as % CTB, % CTB Less Super, % Taxable and % After Tax.

Expense and deduction classes

STP note: The STP reporting column shows the relevant STP Phase 2 reporting treatment. Codes D and G are only for Child Support deductions and garnishee notices. Codes F and W must only be used for union or professional association fees and workplace giving.

Child Support example

John has a Child Support payment of $482 per week. The amount must be deducted from his pay and paid to the required recipient.

1. Open the Deductions tab and click Add New Deduction Rule.
2. Optionally click the Child Support template, then check the values.
3. Enter a clear Title, such as Child Support - J Smith.
4. In Staff, select the employee who is subject to the notice.
5. Choose Fixed and enter the amount, for example 482.
6. Choose a Bank Account if the amount should be included in the ABA file.
7. For Class, choose Child Support (PEA) or Child Support (72A) according to the current notice.
8. Click Add Rule.

For Child Support (PEA), Microkeeper adjusts the deduction when necessary so the employee's after-tax pay does not fall below the Protected Earnings Amount. The PEA is maintained in Microkeeper and converted for the account's pay frequency. The 72A classification does not apply this PEA protection.

Salary sacrifice example

Pam has a before-tax salary sacrifice of $135 per week. The amount is paid into her super fund as salary-sacrifice super.

1. Open the Expenses tab and click Add New Expense Rule.
2. Optionally click the Super Sal Sac template, then check the values.
3. Enter a clear Title, such as Salary Sacrifice - Pam B.
4. In Staff, select the employee who is salary sacrificing.
5. Choose Fixed and enter the amount, for example 135.
6. Choose Super for Class.
7. Click Add Rule.

To send the salary sacrifice to the employee's super fund, configure the employee's Expense Super details:

1. Open Menu > Settings > Employees.
2. Click Edit next to the employee.
3. Scroll to Super Fund Details.
4. Select the Super Fund and enter the Member Number in the Expense Super row.

Use Auto fill all super when the same fund and member details should be copied across the super categories.

Set up a bank account for automatic deduction payments

To pay a deduction automatically in an ABA file, first create a Deposit account for the recipient. A Deposit account is used when funds are paid to an account, such as Child Support.

1. Open Menu > Settings > General > Bank Details.
2. Click Add Bank Account, then choose Deposit.
3. Enter the Nickname, Account Name, BSB, Account Number and Reference.
4. For Child Support, use Quick Fill > Child Support when helpful, then check the supplied details.
5. For the Reference, enter the reference ID required by the recipient. For Child Support, this is the reference supplied by the relevant authority.
6. Click Add Bank Account.
7. Return to the rule and select the new account in Bank Account.

Deposit accounts do not require a Bank Code, APCA code or Group. If No Bank Account remains selected, the rule is not assigned an automatic ABA destination.

Import or export expense and deduction rules

The CSV Transfer menu can export existing rules or import a list of rules.

1. Click CSV Transfer > Export CSV to download the current format. Use the exported header row as the import template.
2. To import rules, click CSV Transfer > Import CSV and select a CSV file. The file must be no larger than 1 MB and its first row is treated as headers.
3. Review the result after import. An existing rule is matched by NRID first, then by Title; a row with no match is inserted as a new rule.

Some characters are removed during import. Review the rules on the page after importing.

Deductions and expenses troubleshooting

Guides related to deductions and expenses

• How Pay Is Calculated
• Extra Rules