Create post-tax deductions
About post-tax deductions
With Square Payroll, you can set up recurring deductions from an employee’s post-tax income to track things like wage garnishments and cash advance deductions.
Once you set up a deduction, Square Payroll deducts the indicated amount from each paycheck and leaves it in your bank account. For wage garnishments, you are responsible for making payments to the appropriate government agency after each pay cycle.
When you run payroll for deductions and the deduction amount exceeds the annual limit you set, the deduction is reduced until it meets the limit. If the deduction exceeds the employee’s net pay, you must reduce the deduction amount until their net pay is greater than or equal to $0.
Before you begin
You can create and assign deductions to an individual employee from their profile in your Square Dashboard.
Create a deduction
Sign in to your Square Dashboard and select Staff & payroll > Team > Team members.
Select the employee you want to assign a deduction.
From the team member panel, select Payroll > Benefits and garnishments.
For Garnishments and other post-tax deductions, select Add garnishment.
Select an existing post-tax deduction from the drop-down menu or select Create new.
If you create a new deduction, enter a Name and Description.
Choose a calculation method from the drop-down menu and enter the dollar amount or percentage of the deduction.
Enter any previous deductions for the year in Enter deductions to date.
Select Add limit to specify the maximum deduction amount for the year.
Select Save.
Deactivate deductions
If you created a deduction with a limit, the deduction automatically stops deducting from your employee’s paychecks once the set limit is met. You can also manually stop a deduction at any time from your Square Dashboard. Deactivating a deduction sets the Stop Deducting At amount equal to the Deducted To Date amount.
Sign in to your Square Dashboard and select Staff & payroll > Team > Team members.
Select the employee you want to edit.
For Benefits and garnishments, select Edit.
Select the deduction you want to remove and select Deactivate.
You can reactivate a deduction by adjusting the Stop Deducting At amount.