Use 'Deduction - Amount' Transaction Category to setup a Transaction Code to process deductions from pay e.g. Deductions made through the payroll for third parties such as Credit Stores.  If the deduction is tax deductible e.g. deductions made for the payment of Professional membership contributions, trade or professional expenses it may be better to use the Tax Deductibles Transaction Code.  

Use the Deduction Amount Transaction Category to record the accumulation of a balance, the repayment of a balance as may be required for a savings scheme where a record of deductions are made and maintained on behalf of the individual.  

To create a 'Deduction - Amount' Transaction Code:

- Go to the 'Edit' , 'Transaction Codes' menu options.

- Click 'Insert' and select the Transaction Category 'Deduction - Amount'.

- Accept/ Change the default 'Code'.  This is a unique identifier for the Transaction Code and the numbers are designed to group similar types of transaction together.

- Enter an appropriate 'Description'.

- 'Contribution is' : select whether the Amount being process is a Percentage or an amount.

- If amounts processed are to accumulate a balance or reduce from a set opening balance select either 'Reduce Balances', or 'Add Balances'

- Enter the 'Employee Amount' and 'Employer Amount' if the the Contribution has been set to 'Amount'.  If the amount varies leave blank and place a tick against 'Manual Edit' which allows the entry of an amount when processing.

- Enter the 'Percentage' for the Employee and the Employer if the the Contribution has been set to 'Percentage'.  If the amount varies leave blank and place a tick against 'Manual Edit' which allows the entry of an amount when processing.

- Select the 'General Ledger' Codes to be entered onto journal reports and exports for the Employee and Employer.

- Select 'Base On' if the amount is a percentage of the rate of pay for the Grade, Internal Grade or Employee Mater Rate of Pay.

- Set the 'Duration' - whether the transaction is to come through for a 'Single', 'Multiple' or 'Indefinite' number of periods.

- Set the 'P6 Field' for year end ITF16 export.  If the transaction is not tax deductible then keep this field blank.

- Set 'Manual Edit' if you would like to be able to enter, or change, the amount of the Allowance when processing.

- Set the 'Default Currency' that this transaction code will be paid in.

- Click 'Ok' to save the new Transaction Code.

Dependencies: This Transaction Code can be based on a percentage, amount or the number of units stated in one or more dependent Transaction Codes.

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Use 'Deduction - Medical Aid' Transaction Category to setup a Transaction Code to process Medical Aid Contributions made by the employee and the employer.  The employee will automatically receive a medical tax credit for the amounts deducted.

To create a 'Deduction - Medical Aid' Transaction Code:

     Click to play

- Go to the 'Edit' , 'Transaction Codes' menu options.

- Click 'Insert' and select the Transaction Category 'Deduction - Medical Aid'.

- Accept/ Change the default 'Code'.  This is a unique identifier for the Transaction Code and the numbers are designed to group similar types of transaction together..

- Enter an appropriate 'Description'.

- Select the 'Medical Aid Scheme' that had been setup under the 'Medical Aid Schemes' menu option on the Edit Menu.

- Select the 'General Ledger' Code to be entered onto journal reports and exports for both the Employee and Employer contributions.

- Tick 'G/L Addition' if you would like the Employee and Employer General Ledger contribution amounts to be added together to make one entry  

- Set the 'P6 Field' for year end ITF16 export.

- Set 'Manual Edit' if you would like to be able to enter, or change, the amount of the Allowance when processing.

- Tick 'Insert Automatically' to have the Medical Aid Transaction Code included automatically on new employee's payslips.

- Set the 'Duration' - whether the transaction is to come through for a 'Single', 'Multiple' or 'Indefinite' number of periods.

- Select whether on a weekly payroll the monthly contribution should be contributions should be split over the number of weeks of the month.  See Overview - Equal Monthly Payments.

- Set the 'Default Currency' that this transaction code will be paid in.

- Click 'Ok' to save the new Transaction Code.

Dependencies: This Transaction Code can be based on a percentage, amount or the number of units stated in one or more dependent Transaction Codes.

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Use the 'Deduction - NEC' Transaction Category to setup a Code to process NEC contributions.  

To Create a NEC Transaction Code

     Click to play

- Go to the 'Edit' , 'Transaction Codes' menu options.

- Check first to see whether the Transaction Code has already been setup.

- Click 'Insert' and select the Transaction Category 'Deduction - NEC'.

- Accept/ Change the default 'Code'.  This is a unique identifier for the Transaction Code and the numbers are designed to group similar types of transaction together.

- Enter an appropriate 'Description'.

- Select whether the NEC contribution will be a Percentage of Basic or a set amount.

- Select whether the NEC contribution is for the NEC General Fund or the NEC Death Benefit Fund. Setup separate Transaction Codes for NEC contributions to the General Fund and Death Benefits.

- Enter the 'Employee Amount' and the 'Employer Amount' if the payment is a standard amount.  If the amount varies leave blank and place a tick against 'Manual Edit' which allows the entry of an amount when processing.

- Select the 'General Ledger' Code to be entered onto journal reports and exports for Employee and Employer contributions.

- Set the 'Duration' - whether the transaction is to come through for a 'Single', 'Multiple' or 'Indefinite' number of periods.

- Tick 'Insert Automatically' to have the Transaction Code included automatically on new employee's payslips.

- Set the 'P6 Field' for year end ITF16 export.

- Set 'Manual Edit' if you would like to be able to enter, or change, the amount of the Allowance when processing.

- Set the 'Default Currency' that this transaction code will be paid in.

- Click 'Ok' to save the new Transaction Code.

Dependencies: This Transaction Code can be based on a percentage, amount or the number of units stated in one or more dependent Transaction Codes.

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Use the 'Deduction - Pension' Transaction Category to set up a code to process pension deductions.  Pension contributions can be calculated as a percentage or as an amount for the employee and employer.  The percentages apply to to the Basic set up in the Employee Master, the NEC Grade or Grade rate for the employee. This Transaction Category is used to create a NSSA Pension, or any other pension deduction code taking into account the pension tax free deduction amount.

To create a 'Deduction - Pension' Transaction Code:

- Go to the 'Edit' , 'Transaction Codes' menu options.

- Click 'Insert' and select the Transaction Category 'Deduction - Pension' Transaction Code.

- Accept/ Change the default 'Code'.  This is a unique identifier for the Transaction Code and the numbers are designed to group similar types of transaction together.

- Enter an appropriate 'Description'.

- Select whether the pension contribution will be a calculated as a percentage of basic or an amount entered.

- Enter the 'Employee Amount' if the payment is a standard amount.  If the amount varies leave blank and place a tick against 'Manual Edit' which allows the entry of an amount when processing, or.

- Enter the 'Percentage' to be applied.

- Select the 'General Ledger' Code to be entered onto journal reports and exports.

- 'Base On' - If the contribution is being calculated as a percentage of basic, then select whether the amount should be based on basic entered in the Employee Master, Internal Grade Rate or Grade Rate.

- Tick 'G/L Addition' if you would like the Employee and Employer General Ledger contribution amounts to be added together to make one entry

- Set the 'Duration' - whether the transaction is to come through for a 'Single', 'Multiple' or 'Indefinite' number of periods.

- Tick 'Insert Automatically' to have the Transaction Code included automatically on new employee's payslips.

- Set the 'P6 Field' for year end ITF16 export.

- Set 'Manual Edit' if you would like to be able to enter, or change, the amount of the Allowance when processing.

- Set the 'Default Currency' that this transaction code will be paid in.

- Click 'Ok' to save the new Transaction Code..

National Social Security Authority (NSSA)

NSSA contributions are set up using the pension transaction code.  The percentage deduction as of 1 January 2020 is 4.5% for the employee and 4.5% for the employer giving a total contribution of 9%.  The current threshold is ZW$5000 per month giving a maximum contribution of $225 per month.  The following is a sample NSSA Transaction Code setup where the thresholds have been applied and Equal Monthly Payments selected.

Use the 'Automatic Insert Rules' to specifiy that the 'Insert Automatically' only applies to Permanent employees.

To Create a NSSA Transaction Code

     Click to play

- Go to the 'Edit' , 'Transaction Codes' menu options.

- Click 'Insert' and select the Transaction Category 'Deduction - Pension' Transaction Code.

- Accept/ Change the default 'Code'.  This is a unique identifier for the Transaction Code and the numbers are designed to group similar types of transaction together.

- Enter an appropriate 'Description'.

- Select whether the pension contribution will be a calculated as a percentage of basic or an amount entered.

- Enter the 'Employee Amount' if the payment is a standard amount.  If the amount varies leave blank and place a tick against 'Manual Edit' which allows the entry of an amount when processing, or.

- Enter the 'Percentage' to be applied.

- Select the 'General Ledger' Code to be entered onto journal reports and exports.

- 'Base On' - If the contribution is being calculated as a percentage of basic, then select whether the amount should be based on basic entered in the Employee Master, Internal Grade Rate or Grade Rate.

- Tick 'G/L Addition' if you would like the Employee and Employer General Ledger contribution amounts to be added together to make one entry

- Set the 'Duration' - whether the transaction is to come through for a 'Single', 'Multiple' or 'Indefinite' number of periods.

- Tick 'Insert Automatically' to have the Transaction Code included automatically on new employee's payslips.

- Set the 'P6 Field' for year end ITF16 export.

- Set 'Manual Edit' if you would like to be able to enter, or change, the amount of the Allowance when processing.

- Set the 'Default Currency' that this transaction code will be paid in.

- Click 'Ok' to save the new Transaction Code..

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Use the 'Deduction - Savings' Transaction Category to set up a code to process Savings deductions.  Savings contributions can be calculated as a percentage or as an amount for the employee and employer.  The percentages apply to to the Basic set up in the Employee Master, the NEC Grade or Grade rate for the employee.  The amount deducted from the employee's net pay is added to the savings balance which is recorded in the Employee Master Record of the individual.  This amount is available for the employee to draw down upon in accordance with the rules that have set up.

To create a 'Deduction - Savings' Transaction Code:

- Go to the 'Edit' , 'Transaction Codes' menu options.

- Click 'Insert' and select the Transaction Category 'Deduction - Savings' Transaction Code.

- Accept/ Change the default 'Code'.  This is a unique identifier for the Transaction Code and the numbers are designed to group similar types of transaction together.

- Enter an appropriate 'Description'.

- Select whether the savings amount will be a calculated as a percentage of basic or an amount entered.

- Enter the 'Employee Amount' if the payment is a standard amount.  If the amount varies leave blank and place a tick against 'Manual Edit' which allows the entry of an amount when processing, or.

- Enter the 'Percentage' to be applied.

- Select the 'General Ledger' Code to be entered onto journal reports and exports.

- 'Base On' - If the contribution is being calculated as a percentage of basic, then select whether the amount should be based on basic entered in the Employee Master, Internal Grade Rate or Grade Rate.

- Set the 'Duration' - whether the transaction is to come through for a 'Single', 'Multiple' or 'Indefinite' number of periods.

- Set 'Manual Edit' if you would like to be able to enter, or change, the amount of the Allowance when processing.

- Savings would not require a P6 field since it is not reportable for tax purposes.  Facility has been given to set a 'P6 Field' for year end ITF16 export if the transaction category is being used for a non savings transaction.

- Set the 'Default Currency' that this transaction code will be paid in.

- Click 'Ok' to save the new Transaction Code.

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Use 'Deduction - Trade Union' to setup a code to process trade union subscriptions.

To create a 'Deduction - Trade Union' Transaction Code:

- Go to the 'Edit' , 'Transaction Codes' menu options.

- Click 'Insert' and select the Transaction Category 'Deduction - Trade Union'.

- Accept/ Change the default 'Code'.  This is a unique identifier for the Transaction Code and the numbers are designed to group similar types of transaction together.

- Enter an appropriate 'Description'.

- 'Base On' - If the contribution is being calculated as a percentage of basic, then select whether the amount should be based on basic entered in the Employee Master, Internal Grade Rate or Grade Rate.

- Enter the 'Contribution' if the payment is a standard amount.  If the amount varies leave blank and place a tick against 'Manual Edit' which allows the entry of an amount when processing, or

- Enter Contribution %.

- Set 'Manual Edit' if you would like to be able to enter, or change, the amount of the Allowance when processing.

- Select 'Tax Deductible' if the amount is to be deducted from income in the FDS tax computation.  Since Trade Union contributions are paid as a direct result of earning income they are considered to be a legitimate deductible amount.

- Set the 'Duration' - whether the transaction is to come through for a 'Single', 'Multiple' or 'Indefinite' number of periods.

- Select the 'General Ledger' Code to be entered onto journal reports and exports.

- Set the 'P6 Field' for year end ITF16 export.

- Set the 'Default Currency' that this transaction code will be paid in.

- Click 'Ok' to save the new Transaction Code.

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The subscription can be setup as a percentage or an amount of the basic setup in the Employee Master, the NEC Grade or Grade.   Since Trade Union contributions are expense directly related to the production of income we consider the deductions to be tax deductible.  The 'Tax Deductible' field allows the User to make the contribution tax deductible, or not.

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Use the 'Deductible - Retirement Annuity' Transaction Category to set up a Transaction Code to process pension contributions that have been contributed outside of the payroll.  These amounts are taken into account in the calculation of PAYE.

To create a 'Deductible - Retirement Annuity' Transaction Code:

- Go to the 'Edit' , 'Transaction Codes' menu options.

- Click 'Insert' and select the Transaction Category ' Deductible - Retirement Annuity' Transaction Code.

- Enter a Transaction 'Code' reference.  The system does not prompt with a number.  Use a code number that would group similar types of transaction together.

- Enter an appropriate 'Description'.

- Select the 'General Ledger' Code to be entered onto journal reports and exports.

- Set the 'Default Currency' that this transaction code will be paid in.

- Click 'Ok' to save the new Transaction Code.

The full amount of the Contribution is shown on Payslip input but this amount is not included in the calculation of 'Net Paid', the only impact occurs when there is a reduction in PAYE calculated caused by the contribution ranking for pension deduction.

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To create a Tax Deductible Transaction Code for processing tax deductible amounts incurred by the employee outside the payroll:

- Go to the 'Edit' , 'Transaction Codes' menu options.

- Click 'Insert' and select the Transaction Category 'Tax - Deductibles' Transaction Code.

- Enter an appropriate 'Description'.

- Select the 'General Ledger' Code to be entered onto journal reports and exports.

- Accept the default P6 Field 'Deductions - Other'.

- Set the 'Default Currency' that this transaction code will be paid in.

- Click 'Ok' to save the new Transaction Code.

Note: If the organization is processing deducting the tax deductible amount from the employee's pay through the payroll then setup the Transaction Code using the NEC Category.  In this way the amount is deducted from the employee's pay and the employee receives the tax benefit in the form of a deduction.  To do this:

- Go to the 'Edit' , 'Transaction Codes' menu options.

- Click 'Insert' and select the Transaction Category 'Deduction - NEC' Transaction Code.

- Enter an appropriate 'Description'.

- Select the 'General Ledger' Code to be entered onto journal reports and exports.

- We suggest that the the default P6 Field be changed to 'Deductions - Other'.

- Set the 'Default Currency' that this transaction code will be paid in.

- Click 'Ok' to save the new Transaction Code.