Deduction Types

In addition to system deductions, there are four deduction types in AptaFund: Benefit, Deduction, FTE Benefit, and Taxable Benefit. Your database may also provide some region-specific options.

Benefit & Deduction

The Benefit type and Deduction type can be used to differentiate between benefits and deductions, although AptaFund allows both types to have an employer portion (benefit) and employee portion (deduction).Both the Benefit type and the Deduction type are treated the same way behind-the-scenes in AptaFund. The two types are provided should you choose to differentiate between benefits and deductions in your business process. Each record in Manage Deductions can have both an employer portion (benefit) and an employee portion (deduction). You do not have to enter two records for each deduction/benefit unless you want to distinguish the two.

FTE Benefit

The FTE Benefit type can be used for benefits or deductions that apply only to jobs which have a full-time equivalency (FTE) value greater than zero. The Jobs/Addenda field in Manage Deductions can be used to limit the jobs to which such a deduction is assigned.

Taxable Benefit

The Taxable Benefit type is used to tax certain kinds of employee benefits, for example, the use of a vehicle or life insurance over $50,000. When the Taxable Benefit type is selected, the amount entered for the deduction will be added to the employee’s gross income and then removed after deductions and taxes are applied.

The following example illustrates the calculation for the Taxable Benefit deduction type:

Gross Pay Period Wages + Taxable Benefit Amount = Adjusted Gross Wages - Pre-Tax Deductions = Taxable Wages - Federal and State Taxes = After Tax Wages - Post-Tax Deductions  = Net after Post-Tax Deductions - Taxable Benefit Amount = Net Income

Taxable Benefits types have the following restrictions:

 

Return to Add a Deduction or Benefit

Return to Manage Deductions Overview