Creating and processing a child support deduction in EXO Payroll (New Zealand)

Inland Revenue Child Support administers the child support scheme which is designed to collect the money from a liable parent. A deduction should only be processed after receiving the notification from Inland Revenue.

Processing Child Support in the New Zealand version of MYOB Exo Payroll is done using a deduction.

To create a child support deduction

Log into the company in the software.
Go to the Maintenance menu then select Deductions. Alternatively, press the F2 button to bring up the Maintenance form then select Deductions.
Click on the Add:F4 button or press the F4 key to bring up the Deduction Maintenance screen.
In the Name field, enter a name that explains what the deduction is for, e.g. Child Support.
Ensure that the "Post -Tax Deduction" option is ticked.
Set the Calculation Method to Fixed Dollar Amount.
Leave the Amount field blank. Doing this will allow the deduction to be used for multiple employees if required.
Set the Type field to Child Support. If this field is not set to Child Support then the amount deducted will not appear as required on the IR345 and IR348 reports.
Enter a General Ledger code if this field is available.
In the "Protected Pay Amount" and "Protected Pay %" fields, enter the figures as required.
When a portion of the employee's pay is to be protected as determined by the figures entered in the "Protected Pay" fields, if there is insufficient gross pay to ensure that the full amount is deducted and a part payment is to be made then tick the "Make a part deduction" option.
Do not tick the "Pay deduction by consolidated direct credit" option. Child Support payments are paid to IRD as part of the IR345 payment as well as appearing on the IR345 and IR348 reports. Note: If multiple staff have this deduction in their pays, ticking this option will combine their payments into a single direct credit payment to the details entered in these fields. This can cause an overpayment to IRD to occur.
Click the Save:F10 button or press the F10 key to save the deduction setup.

To process a child support deduction in pays

Once the deduction has been created then it should be added to the employee's Standard Pay. The Standard Pay screen can be found in the Employee Maintenance window.

Go to the File menu then select Open Employee. Alternatively, click on the Edit Employee button in the Toolbar.
Select the employee then click on the Standard Pay tab.
Click on the Deductions button to access the Deductions screen.
Click on the Add:F4 button or press F4 to add the deduction.
Select the Child Support deduction.
Enter the Amount to be deducted as has been advised.
Click on the Save:F10 button or press the F10 key to save the deduction.
The Child Support deduction has now been added to the Standard Pay and will appear in future Current Pays.

Variation codes

If the Child Support deduction amount being paid in the Current Pay varies from the standard figure then a Variation Code field appears. Below are the different codes for use in this field:

C = Ceased Employment - If an employee stops working, deduct child support only from the last full pay and from any holiday pay owed to them. Use "C" as the variation code so that IRD can remove the employee from the company records. NOTE: Do not use this variation code if the employee stops then restarts work for the company within the same month (use varation code "O" instead).
A = Payment in Advance - Sometimes an employee may be paid in advance, e.g. the employee will be on holiday on the next payday. When this occurs deduct the child support as though the employee was being paid on the usual payday. This amount is included with the deductions for the period when the employee was given the advance pay. The child support that has been deducted will be more that usual for that period so enter "A" as the variation code.
P = Protected Earnings - If the deduction of the child support amount would leave the employee with less than 60% of their net earnings then the full amount cannot be deducted. This portion of their earnings are protected. In these cases use "P" as the variation code.
S = Short-term Absence - If an employee is on unpaid leave for a short period of time and any (or all) of the child support amount cannot be deducted, use the "S" variation code.
D = Previously Deducted - Sometimes the full amount of child support may not have been deducted because an advance payment had been made previously. Because the child support deducted will be less then usual for that period then use the "D" variation code.
O = Other - If none of the other variation codes can be used to explain why the amount of child support deducted is not what it is expected to be, use the "O" variation code.

Need more help? You can open the online help by pressing F1 on your keyboard while in your software.

You can also find more help resources on the MYOB Exo Employer Services Education Centre for Australia or New Zealand.