What if you fail to take deductions or make incorrect deductions?
If you fail to take a deduction from the employee’s net earnings when you should have or take an incorrect amount you should correct this on the next payday or paydays.
Where the incorrect amount is because the deduction was less that the amount specified under the regulations then you should first;
- Deduct the amount required for the current pay period.
- Then include the difference between the incorrect and correct amount for the previous period.
Where the incorrect amount is because the deduction was more than the amount specified under the regulations then you should first;
- Deduct the amount required for the current pay period.
- Then reduce that deduction amount by the excess previously taken.
It is important to note that if a deduction is reduced in any week or month simply because the DEA along with any other orders in place will breach the protected earnings limit of 60% (See example 3 – section 12) this is NOT considered a shortfall as described above.
A shortfall only occurs when an incorrect amount has been deducted in error, or where one or more deductions have been missed.
Please also note that the total to be deducted, including adjustments for an incorrect deduction, along with other deductions in place, must not leave the employee with less than the protected earnings limit of 60% for each pay period.