Set up a Deduction Based On Disposable Net Pay

Some garnishment deductions are ordered as a percentage of disposable net pay. Disposable net pay is net pay before voluntary deductions like insurance, advance repayments and/or union dues.

To set up a deduction based on Disposable Net:

1. Select Setup>Payroll Items.
2. Set up a Deduction item.
3. Select Disposable Net in the Based On field.
   

Note: Review other deductions in this client and check the Include in Disposable Net field as needed. When you set up a deduction item, the Include in Disposable Net field is unchecked. Any deduction with the Include in Disposable Net box checked will be calculated after the deduction Based On Disposable Net. If the Include in Disposable Net box is unchecked, that deduction will be calculated before the deduction Based On Disposable Net.

Example:  A garnishment is ordered for 25% of disposable net income.

If the Insurance and Advance deductions have a check in the Include in Disposable Net field, the garnishment deduction will be $165.55. The garnishment is calculated before the insurance and advance deductions are taken.

If the Insurance and Advance deductions do not have a check in the Include in Disposable Net field, the garnishment deduction will be $125.00. The garnishment is calculated after the insurance and advance deductions are taken.

If the Insurance deduction does not have a check in the Include in Disposable Net field and Advance deduction has a check in the Include in Disposable Net field, the garnishment deduction will be $150.00. The garnishment is calculated after insurance, but before the advance deduction is taken.