Making a deduction from wages to repay a parking fine

MM_7769277
MM_7769277 Member Posts: 115 ✭
edited July 2020 in Accounts Hosted
Hi everyone,

We have to process a deduction from our employee's wage to repay a parking fine - with the approval from both our independent HR consultant and with the employee himself.

My question is, how do I set this up in Reckon? Do I create a new Payroll Item, and if so, which GL account should it feed into? We currently have:

Payroll Liabilities:Income Tax Deduction
Payroll Liabilities:PAYG Withholding Payable
Payroll Liabilities:Student Loan Repayments
Payroll Liabilities:Superannuation Payable
Payroll Liabilities:Superfund Liability

And limited ability to create or change these, as they are dictated by our parent company.

Thanks again in advance!

MM

Comments

  • John Graetz
    John Graetz Member Posts: 1,651 ✭✭✭
    edited July 2020
    HI MM.  It is not clear from what you are saying, whether or not the employer has paid the fine on behalf of the employee and now the employee is repaying the debt.  If this is the case, you could set up the deduction to go to whatever general ledger account the original debt went to and then there would be no necessity to make any other entries.  Over time, the deductions would extinguish such a debt in your books.
    The accounts that you have listed tend to relate to payments that you have to make at the end of the month (or whatever) to external parties.  If you do have to make this payment to an external party, then ideally you should set up another account called say Payroll Liabilities:Other Deductions.  John L G
  • MM_7769277
    MM_7769277 Member Posts: 115 ✭
    edited January 2017
    Hi John,

    The Employer has paid the fine on behalf of the employee who is now repaying the debt.

    Thanks for your help, it answers my question perfectly!

    Regards
    MM

  • John Graetz
    John Graetz Member Posts: 1,651 ✭✭✭
    edited July 2020
    Excellent - thanks for letting know.  John L G
  • John Graetz
    John Graetz Member Posts: 1,651 ✭✭✭
    edited December 2016
    There are potentially at least two issues that could arise if one was to follow your course of action, GSD Support.
    1.  You have no guarantee that the employee is going to use the money to pay the fine (which in this case the employer has already paid)
    2.  By giving cash direct to an employee, who then has to pay it back, you are potentially triggering a Fringe Benefits transaction, in the form of a loan, which could then be subject to the payment of FBT.   John L G
  • Kelly_9053791
    Kelly_9053791 Member Posts: 29 ✭
    edited July 2020
    Hi John

    I am trying to do a similar thing ot the above question - set up a payroll item for expenses covered by the business that now need to be reimbursed by the employee by way of payroll deductions.

    Your initial response makes perfect sense but I'm still unclear on what payroll item i Should create, if I create a "deduction" it wants a name for the supplier that the deduction will be paid to, which makes me think it will then create a liability payment like super etc. 

    Thanks :)
  • John Graetz
    John Graetz Member Posts: 1,651 ✭✭✭
    edited February 2018
    Hi Kelly.  I note that LInda Putland has already responded to your second attempt at getting an answer - sorry I wasn't available at the time to respond - so I want to add a couple of extra things for you, based on my experiences.
    I do have instances of personal expenditure, paid by the employer and subsequently reimbursed through payroll.  This usually entails something to do with travel costs where a component of the overall cost is personal, AND the initial expense has been incurred on a Corporate Credit Card (it could also happen with another type of transaction of course).
    As Linda has suggested, I create a Liability account for the employee.  However, I have found that whenever I try to code an expenditure item to that account, I get a "warning" message to the effect that it appears that I am trying to pay a payroll liability, which after a while gets annoying.  To overcome this, I have created two sub accounts under the Liability Account.  One is for the initial cost, for which I usually add a suffix like EXP to the account name and the other with a suffix called REC to which the payroll deduction goes.  Doing that, overcomes the warning message, because I am not recording the payment under the account to which the payroll deduction goes.  Whilst there are two extra accounts involved, they should net off and come back to zero.
    I also add that as part of the employees acquittal of the credit card, they provide me with an authority to deduct the personal amount from their next pay.
    John L G

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