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The IRD may write to an employer telling them to deduct money from an employee and pay it to them.

The IRD tells the employer the total amount to be paid, the amount per pay period, the date the deductions must begin, and the frequency. The IRD also specifies a bank account to pay the deduction into.

This deduction amount does not get paid to the IRD with your PAYE. IRD arrears are a separate payment which must be paid to the IRD separately from PAYE.

To set up an IRD arrears deductions
  1. Set up a deduction called IRD Arrears. It is best to leave the Calculation Method as Fixed Unit Value $1.000 so that it can be used in future situations.

  2. Link the employee to the IRD Arrears deduction. Enter the amount the IRD has asked you to deduct each pay in the Usual Units field.

  3. If the IRD has specified a total amount that must be paid, set the deduction as a reducing balance deduction. Ace Payroll deducts the amount each pay period, and stops automatically when the balance is repaid.

  4. Finally, link the deduction to the specified bank account so that it is paid to the IRD automatically. Enter the reference details the IRD have given you to ensure that the deduction is correctly allocated on the IRD end. These reference details are the reason IRD arrears are paid separately from PAYE deductions.


And you’re done! Ace Payroll makes the deduction each period, and pays it to the IRD each time you do your direct credits, including the correct reference details. The deduction stops automatically once the total amount is paid.