Page 234 - Essentials of Payroll: Management and Accounting

Payr oll Deductions
T IPS &T ECHNIQUES

Some employees can get into the habit of purchasing a large num-
ber of items through the company, which can cause two problems.
First, the payroll staff may find itself tracking multiple repayment
schedules for each employee, which is quite time-consuming.
Second, if an employee leaves the company, the amount of the out-
standing loans to the company for unreimbursed asset purchases
may exceed the person’s final paycheck by a significant amount,
making it difficult for the company to collect on the outstanding
loans. Following two simple rules can prevent these problems. First,
do not allow an employee to purchase something from or through
the company until the last purchase has been fully paid off. Second,
make it company policy that the full amount of such a purchase can-
not exceed the amount of an employee’s net pay for one month, or
perhaps just a single paycheck. These rules reduce the number of
purchase reimbursements to track and lowers the risk of loss to the
company if an employee quits before paying his or her loans.

amounts withheld if this is part of the deal offered to employees, and
forwards the payment to the designated charity. Some employees prefer
to make a single lump-sum payment to the charity, in which case the
company usually forwards its check directly to the charity without gen-
erating a deduction through the payroll system.
Employees can renege on a pledge and ask the payroll department
to stop making further deductions from their pay, though this request
(as is the case for all deductions) should be made in writing and kept in
each employee’s personnel or payroll file for future reference. Also, the

remittance advice that accompanies each employee’s paycheck should
itemize both the amount of each deduction and the year-to-date total
deduction that has gone to the charity. If there are multiple charities for
which deductions are being made,the remittance advice should list each
one separately. The employee needs this information when filing his or

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