If you need to withhold regular child support payments from an employee's pay, you will need to create a regular recurring deduction rule.

You can set up recurring child support payments for both Deductions with Protected Earnings Amount (PEA) and Garnishee 72A notice payments. PEA is an amount of the employee's net pay that is protected from a Child Support Deduction. This amount is updated on the first day of each year and is maintained by Deputy Payroll.

In this article, we cover: 

• Creating a recurring child support deduction
• Setting up your bank accounts in preparation for paying child support

Create a recurring child support deduction

In this example, we will create a recurring 75% 72A Child support garnishee deduction for employee David Johnson that will automatically apply to every pay run for David Johnson.

To set up this recurring deduction, first head to Business settings from the drop-down menu under your name.

On the Pay tab, click on View payroll settings.

Note: If you have multiple entities in Deputy, you'll first need to select the entity in which you'll be setting up expenses and deductions.

Click on Deductions and Expenses on the left-hand side panel and select Deductions.

To set up a recurring deduction, click on Add New Deduction Rule.

Click on Child Support to pre-fill the deduction rule form.

Title

Add a title for the deduction rule, using something like "Child Support" and the name of the employee the Child Support payment is for. In this example, "Child Support David Johnson".

Staff

Select the employee's name from the drop-down list in the Staff field.

Fixed or Percentage

Select whether the Child Support payment will be calculated as a Fixed amount or a Percentage. You will be advised of the required calculation by Services Australia. In this example, we have selected Percentage.

Select how the percentage is calculated and the value.

Bank Account

Select a bank account to pay the child support into. This payment will be included in your pay run ABA file. If you do not nominate a bank account at this step, you will have to make a separate payment of the deduction at a later date.  

If you have already set up your bank account, you can select it from the dropdown and then choose the Classification.

If you need to add a bank account, follow these steps:

Setting up your bank accounts in preparation for paying child support

Click the Add Bank Account hyperlink to open the Bank Details page within Payroll. This will open in another tab.

Click Add Bank Account to open the pop-up.

There is the option to quick fill the Add Bank Account form with Child Support details by clicking on Child Support on the right-hand side of the form.

This will pre-fill many required details, including the Bank account details for Services Australia, where the Child Support payment will go to. However, there are some fields you still need to enter:

Reference

Because you are reporting Child Support payments through Single Touch Payroll, all of the PEA deductions and 72A garnishees you collect from your team members' pays will use the same bank account details, for the Nickname and Reference (the one bank account).

Using the Employer Payment Reference Number as advised by Services Australia allows Services Australia to reconcile the payment being made with the STP report and then with the correct individuals in their system.

Nickname 

It is recommended to use the format Child Support - EPRN for the nickname of the account as this indicates you are using the Employer Payment Reference Number.

Note: There may be an occasion that Services Australia contacts you and asks you to set up a separate bank account for an employee with a Garnishee notice 72A. In this circumstance, you can still use the Child Support Quick fill.

At the point of adding in the nickname, it is recommended to use the format CS - "name of team member paying child support"

For the reference filed, you will need to use the unique reference number provided in the notice from  Services Australia. The unique reference number allows Services Australia to apply the payment being made directly to the correct individual in their system. 

Once you are happy with the settings you have added, click Add Bank Account.

Classification

In Classification, we have selected 'Child Support 72A' for this example.

If the Child Support payment is a deduction with PEA, then you would select 'Child Support (PEA)'. 

Click Add Rule.

The new deduction rule for 'David Johnson Child Support' has been added and will now apply to every pay run for David Johnson.

You can see the child support amount is automatically calculated in the pay run and appears on the pay slip under the Deductions header.

What if I select Child Support PEA?

If the Child Support payment is selected as Child Support (PEA) the calculation will take into account the employee's net pay and only deduct an amount of Child Support that will maintain the protected earnings amount for the employee. For 72A related deductions, the PEA requirement will not be considered.