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Administrator Guide
Last Updated: 2023-06-23
Steps: Create Deductions

Steps: Create Deductions

  • For position-based deductions, configure your Workday tenant to support multiple jobs.
  • Security:
    Set Up: Payroll (Calculations - Payroll Specific)
     domain in Core Payroll functional area.
You can set up deductions to retrieve values such as:
  • Absence deductions.
  • Employee 401(k) contributions (USA).
  • Employee and employer medical or disability insurance contributions (FRA).
  • Employee medical contributions (CAN, UK, USA).
  • Loan deductions (AUS).
  • Values entered through payroll input.
  • Withholding taxes (CAN, UK, USA).
  1. Access the
    Create Deduction
     task.
  2. Enter the deduction identification information:
    Option Description
    Name
    Enter how the deduction displays on payroll results.
    Code
    To use with other Workday applications, enter a code of up to 20 characters. Example: You're configuring integrations in HCM for importing payroll data.
    Default Payslip Name
    Enter the name of the deduction to display on payslip configurations. You can override this field on
    Maintain Payroll Payslip Configuration
    .
    For Payroll for France:
    When you use the
    Payslip to Print - FRA
     standard report to create a payslip layout, you can display aggregated pay components on the payslip.
    To configure an aggregated line, define a
    Default Payslip Name
     that:
    • Is identical for all pay components to be aggregated.
    • Contains characters between square brackets.
    On the payslip, Workday displays the text between square brackets as the payslip name for aggregated pay components.
  3. Specify the
    Country
     that you can use the deduction for.
    When you leave this field blank:
    • You can use the deduction in any country.
    • Workday uses the currency of the pay group for calculations.
    • Workday displays all options for the countries included in your tenant setup.
  4. Define eligibility criteria to determine when Workday calculates the deduction. Example: Restrict the deduction to specific workers or run categories.
  5. Define the calculation that returns the final deduction values.
  6. On the
    Effective Dated
     tab, consider these optional features, which require additional setup.
    Option Description
    Calculation Proration
    Determines how to prorate the deduction when a midperiod event results in multiple subperiods.
    Retro Calculation
    Enables you to configure whether Workday recalculates the deduction during retroactive calculations.
    Multiple Work Jurisdictions
    For Payroll the U.S. This field determines whether to split the deduction calculation based on tax allocation percentages defined for different work jurisdictions.
    Calculation Worktag
    Enables you to tag the deduction with supplemental information such as company, position, location, or loan number. You can then reference the worktag to:
    • Guide the calculation of pay components.
    • Associate pay component values for aggregation or accounting.
    • Limit values displayed for:
      • Accumulation.
      • Reporting
  7. (Optional) In the
    Calculation Worktag
     section, add worktags for supplemental information such as company, position, or location. As you complete the section, consider:
    Option Description
    Calculation Worktag
    When you configure a deduction with a calculation worktag, Workday requires you to enter the worktag also on payroll input.
    For Payroll for Canada and the U.S., to create a position-based deduction for multiple jobs, or for U.S. international assignments, select the
    Position
     worktag.
    You can’t change the calculation worktag after you:
    • Include the deduction in a payroll or retro calculation.
    • Add payroll input for the deduction.
    Include Input
    Select this check box to resolve the deduction whenever Workday processes payroll input for the associated worktag.
  8. Configure Workday to automatically calculate related calculations as part of a deduction.
  9. Define limits for the deduction calculation.
  10. Add deductions to a group of pay component groups, which you can then use in run categories or other configurations. Example: Define which pay components add to the gross pay.
  11. On the
    Non-Effective Dated
     tab, consider these optional features.
    Option Description
    Benefits
    Enables you to link deduction to a benefit plan.
    You can then set up enrollment event rules in HCM to specify when to begin or end payroll deductions based on the benefit plan.
    Costing
    Enables you to specify how to allocate all instances of a deduction for all employees across:
    • Cost centers.
    • Projects.
    • Grants.
    • Other organization types and locations.
    ROE
    For Payroll for Canada:
    You can use these fields to identify the allocation reporting period for ROE reporting.
    Allocation Reporting Period
    : To include deduction amounts for all deductions that you configure with an EI Taxable pay component group, such as EI Taxable [CAN], select
    Period Earned
     or
    Period Paid
    .
    Allocation Reporting Period Retro
    : Workday automatically populates the reporting period with the same value as the Allocation Reporting Period.
The deduction is available for use in payroll processing upon the effective date. You can also set it as a voluntary deduction for employee self-service.
When you modify a pay component that you’ve processed in a retro calculation, either:
  • Move the
    No Retro Processing Prior To
     date after the date of your edit.
  • Create a new effective-dated snapshot for the earning.