Protected Earnings

Overview

Protected Earnings are the minimum amount paid to an employee or contractor as a net wage to cover the basic cost of living.

When a Protected Earnings limit is set, the net payable to an employee will not drop below the limit when any deductions are being applied. This may mean that only a portion of a deduction will be withheld or that some deductions will not be applied to a pay.

Configure a Protected Earnings Limit

To configure the Protected Earnings limit for a deduction item:

1. Go to Config > Payroll > Deduction.

2. Select the deduction you would like to edit.

3. Select whether the limit is based on Gross Wages or Net Wages.

   • If the ‘Pre Tax Deduction’ checkbox is ticked, the Protected Earnings limit will be based on gross wages.

   • If the ‘Pre Tax Deduction’ checkbox is not ticked, the Protected Earnings limit will be based on net wages.

4. Set the Calculation Type as a percentage or fixed value, then enter this value in the Protected Earnings Below field.

5. Click Save.

Order of Application for Protected Earnings Limits

When deductions have a Protected Earnings limit set and they are included in an employee's pay, they will apply in the following order:

1. Pre-tax deductions
2. Tax
3. Post-tax deductions