The employer over-withheld pre-tax health insurance. He then repaid the over deduction by creating an earnings code called additional pay and removing the taxes so the employee was paid the full amount. This takes care of the employee. However, the pre-tax deduction is over-stated by this amount. It appears you cannot enter a negative pre-tax deduction on an adjustment to correct this. What is the best way to move the additional pay to a reduction in the pre-tax deduction?
Best answer by Sonia Echols
My apologies that question remained unanswered. The same question was answered in What is the best way to refund a prior paycheck deduction? | Community
Now, I have some new related questions.
We are developing a specification to allow negative deductions in payroll. While this can increase flexibility, there are concerns about situations where a deduction could result in a negative year-to-date (YTD) balance.
The most likely scenario we see today is when negative deductions are used to create an employee loan. However, best practice would typically be to issue the loan through Accounts Payable. Our goal is to provide flexibility for customers, while also putting in guardrails where necessary.
We’d like your feedback on two specific points:
Reason Requirement – Should the system require that a reason be entered when creating a negative deduction?
Negative YTD Impact – If a negative deduction would cause a deduction mapped to the W-2, T4, or RL-1 to go negative YTD, would you prefer:
To block the entry entirely, or
To allow it, but display a clear warning about downstream reporting impacts?
Thank you for sharing your input—it will help us shape this functionality in a way that balances flexibility with compliance and accuracy.
Sonia Echols
Technical Product Manager, Payroll
+1My apologies that question remained unanswered. The same question was answered in What is the best way to refund a prior paycheck deduction? | Community
Now, I have some new related questions.
We are developing a specification to allow negative deductions in payroll. While this can increase flexibility, there are concerns about situations where a deduction could result in a negative year-to-date (YTD) balance.
The most likely scenario we see today is when negative deductions are used to create an employee loan. However, best practice would typically be to issue the loan through Accounts Payable. Our goal is to provide flexibility for customers, while also putting in guardrails where necessary.
We’d like your feedback on two specific points:
Reason Requirement – Should the system require that a reason be entered when creating a negative deduction?
Negative YTD Impact – If a negative deduction would cause a deduction mapped to the W-2, T4, or RL-1 to go negative YTD, would you prefer:
To block the entry entirely, or
To allow it, but display a clear warning about downstream reporting impacts?
Thank you for sharing your input—it will help us shape this functionality in a way that balances flexibility with compliance and accuracy.
Sonia Echols
Technical Product Manager, Payroll
I’ve used about 8 different payroll systems over my 25 years of payroll, and Acumatica is the first system that does not allow negative amounts to be entered against pay codes. I hope this change is implemented soon.
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