1. Set up a reducing balance deduction pay item

1. Go to the Payroll menu and choose Pay items. The Pay items page appears.
2. Click Create deduction. The Create new deduction window appears.

3. Choose the deduction Type.

4. Enter the deduction Name.

5. If you'd like a different, more personalised, name to show on payslips for this deduction, enter a Name for payslip, such as "Court fines - Steven".

6. (Optional) Enter the Default amount per pay to be deducted. If required, you can set a custom amount for different employees (see Assign the pay item to the employee below for details).

7. If the Tax can be changed (some deduction types are set and can't be changed), choose whether the deduction is After tax or Before tax. If you're not sure, check with your accounting advisor or Inland Revenue.

8. Select the option Reducing balance deduction.
   

9. Click Save.

You can now assign this deduction to one or more employees - see the next task for details.

Assign the deduction to an employee

To include the deduction in an employee's pay, you need to assign it to them. Here's how:

1. From the Payroll menu, choose Employees.
2. Click the employee's name.
3. Click the Pay items - earnings & deductions tab.
4. In the Deductions section, click the dropdown arrow next to the Add deduction... field.
5. Choose the deduction you're assigning.
6. If you didn't set a default amount per pay when you set up the deduction, enter a value in the Amount field. This amount will only apply to this employee.
7. Enter the <total deduction amount> what's the field name?
8. Anything else?<add pic/GIF>
9. Click Save.

Next time you process a pay, the deduction will be listed for the employee. See the next task for details.

Process a pay with the deduction 

After you've assigned the deduction to an employee, it'll appear in their pay until the limit is reached.

Let's take a look:

1. Go to the Payroll menu and choose Enter Pay.

2. Select the employee to be paid then click Start Pay Run.
   The deduction is shown.

   Protected net earnings (New Zealand)

   Child support and court fines deduction amounts cannot be changed in the pay run. Based on the employee's pay, the deduction amount may automatically reduce to protect minimum earnings. Learn more about protected net earnings on the IRD website.

3. Continue processing the pay as normal. Amounts deducted are allocated to your payroll deductions account, ready to be paid to the applicable governing body.

Can I change the account my deductions are allocated to?

Deductions withheld from pays are allocated to a liability account in MYOB Essentials called Payroll deductions. This is a system account which cannot be changed.

You can find this account by clicking your business name and choosing Accounts list, then scrolling down to Liability > Current Liabilities.

What if the deduction amount varies between employees?

You can set a different deduction amount for each employee when assigning then the court fine deduction pay item. See Assign the pay item to an employee above for details.