# Invoice - Deduction Examples

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Below are examples of the different types or components to a deduction.

## DI Exempt

Example 1

Deduction D is a DI Exempt deduction for a retirement fund. Deduction D requires \$300 per paycheck, regardless of the net pay.

An employee's gross pay is \$1000 and the employee must make \$450 per paycheck to satisfy the set limit.

After all deductions and taxes, the employee's paycheck is equal to \$675. Since Deduction D is DI exempt, the employee's net pay will be equal to \$375, even though the total is below the set limit.

## Non-DI Exempt

Example 1

Deduction N is a Non-DI Exempt deduction for \$250.

An employee's gross pay is \$750 and the employee must make \$300 per paycheck to satisfy the set limit.

After all deductions and taxes, the employee's paycheck is equal to \$500. Since Deduction N cannot be taken out in full without causing the employee's net pay to fall below to set limit, Deduction N will only take out \$200 of the \$250.

If the employee's paycheck was \$1000 and after deductions and taxes, the pay is equal to \$700, then the full \$250 would be taken out for Deduction N.

## Tiered Deductions

Example 1

An employee's gross pay is \$1000. At the time of the deduction (Deduction T), the remaining pay is \$750.

Deduction T is set up so that:
• \$0-\$800 = \$50 deducted

• \$801 - \$1200 = \$75 deducted

• \$1201 - \$1600 = \$150 deducted

• \$1601 - max = 25% deducted

Since the employee's pay is \$750 at the time of the deduction, only \$50 is deducted from the paycheck for Deduction T.

## All-Or-Nothing

Example 1

Deduction A is an All-Or-Nothing deduction for \$200.

An employee's gross pay is \$900, and the employee must make \$500 per paycheck to satisfy the set limit.

After deductions and taxes, the employee has a pay of \$600.

If Deduction A is a DI Exempt deduction, the full \$200 would be taken out, leaving the employee with a net pay of \$400.

If Deduction A is a Non-DI Exempt deduction, then nothing would be taken out, and the employee would have a net pay of \$600.

## Limits

Example 1

Deduction L (a levy) has a pay period limit of \$75.

An employee's gross pay is \$1000, and after deductions, the employee has a remaining pay of \$800. The levy is "All but \$700". Since the pay period limit is \$75, the levy takes \$75, leaving \$825 for a net pay.

Example 2

Deduction D has a monthly limit of \$100.

An employee has a gross pay of \$700 per pay period on a semi-monthly schedule.

Per pay period, Deduction D is set for \$75. The first period, Deduction D takes out the full amount, leaving the employee with a remaining pay of \$625.

The second period, Deduction D takes out \$25, due to reaching its limit, leaving the employee with \$675 remaining pay.

## Max Percent Of Net

Example 1

An employee's Max Percent of Net is 50%. Their Gross Pay is \$1000, which means no more than \$500 can be taken from their paycheck, unless the deduction is DI Exempt.

Deduction A is Non-DI Exempt for \$200. Deduction B is Non-DI Exempt for \$250. Deduction C is \$75. If Deduction C is Non-DI Exempt, the deduction will take out \$50 of the \$75 leaving the employee with \$500. If Deduction C is DI Exempt, it will take out the full \$75 leaving the employee with \$475.

## Deduction Max Percent

Example 1

A deduction's Deduction Max Percent is set for 25%. An employee's remaining pay at the time of the deduction is \$750. This means that the deduction can take no more than \$187.50 from the paycheck.

## Sequence

Example 1

An employee's gross pay is \$1500, and the employee must make more than \$650 per paycheck in order to satisfy the set limit.

The deduction sequences are as follows:
1. Deduction A (Non-DI Exempt) = \$150

Deduction B (Non-DI Exempt) = \$50

2. Deduction C (Levy) = All but \$1200

3. Deduction D (Tiered)

 Example Income Bracket Amount Deducted \$0-\$250 \$0 deducted \$251 - \$500 \$10 deducted \$501 - \$1000 \$20 deducted \$1001 - \$1500 \$50 deducted \$1501 - max 10% deducted.

4. Deduction E (DI Exempt) - \$300

Deduction F (DI Exempt) - \$50

5. Deduction G (All-Or-Nothing, Non-DI Exempt) - \$200

6. Deduction H (All-Or-Nothing, DI Exempt) - \$250

Since sequences dictate priority in most scenarios, Sequence 1 is taken out first. Both are able to be taken out. So the remaining pay is (\$1500 - \$150 - \$50) = \$1300.

Sequence 2: The levy takes out "All But \$1200," so the levy takes \$100 from the paycheck leaving \$1200.

Sequence 3: Since we are at \$1200 remaining, the deduction would be equal to \$50. So the remaining pay is (\$1200 - \$50) = \$1150.

Sequence 4: Both deductions are able to be withheld, so the remaining pay is (\$1150 - \$300 - \$50) = \$800.

Sequence 5: Since (\$800 - \$200) is \$600 and that is below the set limit, none of Sequence 5 will be processed. So the remaining pay is still \$800.

Sequence 6: Since Deduction H is an All-Or-Nothing and DI Exempt, all \$250 will be taken out, even though it goes below the set limit. So the employee's net pay is (\$800 - \$250) = \$550.

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