Available for the following plans: Employment Plus, Employment Unlimited
Available for the following Payroll plans: Standard, Premium, Core Payroll, Unlimited+Payroll
A payroll deduction occurs when an employer removes funds from an employee's pay before they receive their pay cheque. While some payroll deductions are mandated by legislation, others are the result of a private agreement between an employer and employee.
The Payroll platform default setup for a new business includes three basic deduction categories:
- Salary sacrifice super
- Pre-tax deduction
- Post-tax deduction
The Deduction Categories feature allows you to create a new deduction category and specify details such as the category, external ID, payment classification, and liability general ledger mapping code. You can also use this feature to edit any previously entered information and delete a record that is no longer required.
Getting started
- Click the Business Settings menu.
- Click the Payroll Settings submenu.
- Click the Deduction Categories button.
- Click the Add button.
- Complete the following fields:
- Name
- Deduction type
- Impact on SG calculations
- External ID
- Classification
- Expense general ledger mapping code
- Liability general ledger mapping code
- Click the Save button.
Manage data
- Click the Business Settings menu.
- Click the Payroll Settings submenu.
- Click the Deduction Categories button.
- Click the deduction category that needs to be edited.
While you will remain on the Deduction Categories window, a form called Edit Deduction Category will now appear.
- Make the required changes to the Edit Deduction Category form.
- Click the Save button.
- Click the Business Settings menu.
- Click the Payroll Settings submenu.
- Click the Deduction Categories button.
- Click the Delete button (which is shaped like a red x).
- On the Confirm Delete? window that will now appear, click the Delete button.
When setting up or editing a pre-tax deduction category, you have the option to configure the category to Reduces ordinary time earnings/qualifying earnings.
When this setting is enabled on a deduction category, the deduction will reduce the employee's qualifying earnings (QE) in the pay run. This means the Super Guarantee (SG) will be calculated on the reduced qualifying earnings amount — consistent with the established method for OTE-based super calculations.
This setting does not change how the deduction category itself is configured; it simply extends the existing OTE reduction behaviour to also impact qualifying earnings as expected for Single Touch Payroll (STP) reporting.
Key point: If a deduction category is set to reduces ordinary time earnings/qualifying earnings, the deduction will reduce the qualifying earnings figure reported via STP, which in turn reduces the super guarantee obligation for that pay run.
Exclude QE checkbox in the pay run
When a deduction is included in a pay run — either via a recurring deduction set up on the employee record, or added directly via the Actions button within the employee pay run — a new Excl. QE checkbox will appear against that deduction line.
Important Date Restriction
The Excl. QE checkbox only applies to pay runs with a Date Paid of 1/7/26 or later. If used in a pay run with an earlier paid date, the checkbox will have no effect, and the deduction will apply strictly based on the underlying deduction category settings.
How the checkbox behaves by default:
- If the underlying deduction category is set to Reduces ordinary time earnings / qualifying earnings, the Exclude QE checkbox will be ticked by default, indicating that the deduction is excluding the employee's qualifying earnings (and therefore reducing the super guarantee accordingly).
- If the deduction category is not set to reduce ordinary time earnings / qualifying earnings, the Excl. QE checkbox will be unticked by default.
Overriding the default in the pay run:
Users have the flexibility to manually toggle the Exclude QE checkbox on or off directly within the pay run, regardless of the default set on the deduction category. This allows you to adjust qualifying earnings reporting on a pay run-by-pay run basis where circumstances require it.
- Ticking the checkbox will exclude the deduction amount from qualifying earnings, reducing the SG for that pay run.
- Unticking the checkbox will include the deduction amount in qualifying earnings, and SG will be calculated accordingly.
This gives users an additional control to ensure qualifying earnings and super guarantee are reported accurately for each pay run.
Demo: Add a deduction category