This article explains how to set up a cash advance to be deducted from an employee's next pay cheque and how to assign the cash advance deduction to an employee.
|Note: We recommend that you consult with your accountant or tax adviser before setting up a cash advance repayment deduction.|
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Set up a cash advance payment deduction
The following steps show you how to set up a cash advance payment deduction:
- Select the Gear icon on the Toolbar, then Payroll Settings.
- Select Deductions/Contributions.
- Select Add a new Deduction/Contribution.
- From the Category drop down menu, select Other deductions.
- From the Type dropdown, select Cash Advance Repayment.
- Enter an appropriate description in the Description field.
- Select Ok.
- A pop-up will appear asking if you want to assign the saved deduction to an employee.
- Select Yes or No. Yes will take you directly to the Employees page to apply the deduction.
Assign the cash advance deduction to an employee
- From the left menu, select Employees.
- Select the employee by choosing their name.
- Select the edit pencil next to question #5.
- In the Deduction/contribution drop-down menu, select the cash advance deduction you created above.
- In the Amount per pay period drop-down menu, select either $ Amount or % of Gross Pay.
- Enter the amount or percentage.
- (Optional) Enter the annual maximum amount.
- Select Ok.
- Select Done.
In your Payroll Settings, you can select an asset account to track this deduction.
|Note: Because the pay and deduction report to two different types of accounts, they will show separately on reports. To balance these amounts, you can create a journal entry debiting the Repayment asset account and crediting the Reimbursement expense account.|