Before setting up a reducing balance allowance, you need to be aware of the following:
A reducing balance allowance is setup with a capital sum that reduces each time it is paid by the employee. The capital sum can be set-up as a standard value or percentage-based.
The balance due is reduced by the value that the employee is setup to pay for each payroll run.
This type of allowance will continue to be taken until the balance is reduced to zero.
The value or percentage is assigned to the employee. If a value is assigned, it is the periodic value that is entered and not the capital sum.
A capital sum value also needs to be assigned. This represents the total annual value to be deducted.
The balance due is automatically set to this value initially and will be decremented each payroll run until it reaches zero. The allowance will cease at this point.
📌Note: The system will not process retrospective arrears for a reducing balance pay code assigned to the employee with a date in the past. Reducing balance pay code will calculate from the current period or period relative to the future start date only.
Set up reducing balance allowance
To set up a reducing balance allowance in PeopleXD, follow the steps outlined in the relevant section below.
Portal
To set up a reducing balance allowance in portal, follow these steps.
From the dashboard menu, select Payroll Dashboard.
Click Settings then under Codes, click Pay Codes (Classic).
From the Pay Code drop down menu, select the relevant pay code.
To add a new pay code, click Add or click Duplicate to copy an existing pay code.
Make required changes and take into account the following:
On the General tab, the multiplier needs to be a minus value, e.g. -1, and this needs to be configured before the next part.
On the Allowances/Payments tab, enable the Reducing Balance toggle.
Click Save then set up allowance at the employee level.
Back office
To set up a reducing balance allowance in back office, follow these steps.
Click CorePay, then click Reference.
Click Pay Codes.
You can create either a new pay code or copy an existing pay code.
Make required changes and take into account the following:
On the General tab, the multiplier needs to be a minus value, e.g. -1, and this needs to be configured before the next part.
On the Allowances/Payments tab, select the Reducing Balance indicator.
You can set up allowance at the employee level.