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Transaction Type - Tiered Transactions

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Some organizations have deductions that must be applied in a tiered manner based on the amount of income that the employee has earned.  For example, the deduction rate in an IRS Tax Levy isn't applied until a certain annualized income level is earned by an employee.

 

In This Article...

 

Tier Sub-Tab Field Definitions

 

Set Up a Tiered Transaction

 

Example of a Tiered Transaction

 

 

 

 Tier Sub-Tab Field Definitions

 

 

Field Name Description
Exemptions Not used when configuring tiered deductions and should be left blank.
IsFixAmount When checked, this indicates that a specific dollar amount will be deducted for this tier.
IsPercent When checked, this indicates that a percentage of the income will be deducted for this tier.
IsLevy When checked, this indicates that the entire amount between the Lower Limit and the Upper Limit will be deducted for this tier.
Deduction Rate Sets the specific dollar amount or the percentage that determines the amount deducted for this tier.
Lower Limit Sets the point at which the deduction for this tier will start.
Upper Limit Sets the point at which the deduction for this tier will stop.

 

 

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Set Up a Tiered Transaction

 

Requirements for a Tiered Transaction

A tiered deduction transaction type has two requirements before it can be set up:

 

  1. The transaction type must already have been created and added to the system. For details on creating and configuring transaction types, see Transaction Type - Add / Edit Transaction Types.

  2. It must have a check in the Is Tiered box.
     

 

 

Tiered Transaction Setup Process

Tiered transactions are configured using annualized amounts. If the transaction applies to an employee who is making $217.50 per weekly pay period, multiply that amount by 52 (the number of pay periods per year). The result, $11310.00, is the amount that the transaction should be based on.

  1. From the Start page, select Admin Tools from the Actions menu or click the Admin Tools shortcut button to open the Admin Tool Main window.

  2. Under Category, click System.

  3. Under Select, double-click Transaction Type to open the Transaction Type window.

  4. Click on the Tier sub-tab. 




  5. Search for the desired transaction.

  6. Select the transaction in the grid.



  7. Add a check under the type of deduction to apply to this tier, e.g., IsFixAmount , IsPercent, or IsLevy




  8. Enter a deduction rate, either as a dollar amount or a percentage, depending on the type of deduction it is.

  9. Enter the lower limit for this tier.

  10. Enter the upper limit for this tier.

  11. Press Tab on the keyboard to save your entries and move to the next row.

  12. Repeat the steps above until the desired tiers has been configured.

  13. Press the Tab key on the keyboard when finished to save the transaction.

 

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Example of a Tiered Deduction

The following example further illustrates how a tiered transaction is configured:

 

 

Tier 1

 

No money should be deducted from this employee's income if they make less than $14,560 per year. IsFixAmount has been checked and a Deduction Rate of "$0.00", a Lower Limit of "$.00", and an Upper Limit of "$14,560.00" have been set for this tier.

 

The result will be that no money will be deducted if the employees income lies between $0 and $14,560.00.

 

Tier 2

 

$1000 should be deducted if the employee's income falls between $14,560.01 and $20,000.

 

IsFixAmount has been checked, "$1000.00" has been entered for the Deduction Rate, and the Lower Limit and Upper Limit have been set to "$14,560.01" and "$20,000" respectively.

 

Tier 3

 

If the employee earns over $20,000.01, 12.5% of all income should be deducted.

 

To achieve this result, IsPercent has been checked, the Deduction Rate has been set at as "12.5%, the Lower Limit has been set as "$20,000.01", and the Upper Limit has been set to "$999,999.99", effectively removing the limit.

 

 

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