How to Read the Deduction Screen in Payroll Sync

This article explains how to read the benefit deduction screen in the Payroll Sync Dashboard. It also covers how catch-up deductions work when benefits are added retroactively, and how to interpret reimbursement scenarios when coverage is removed. 

When reviewing employee deductions on the Payroll Sync Dashboard, you'll notice two columns: New Deduction and Old Deduction.

• New Deduction: The amount that should be entered into payroll for the current pay period. Note: The "new deduction" amount may not always be the new standard. Further detail below!
• Old Deduction: The amount that was previously entered into payroll.

For example, if the employee didn’t have a health deduction before, the Old Deduction will show $0.00. If they now have health coverage, the New Deduction will reflect the amount tied to the new health plan going forward.

If rates changed, the Old Deduction will reflect the rate that was previously used, and the New Deduction will reflect the new rate. This is common after Open Enrollment.

When you see a benefit change on the dashboard that you're not expecting, best practice would be to navigate to the employee's profile to view their Benefit History or recent Life Events to stay aware of why the benefit deduction changed. 

Catch-Up Deductions Explained

Catch-up deductions occur when an employee makes changes that apply to a previous pay period, like adding new coverage retroactively.

Example Scenario:

• Pay date: 10/15/24
• Benefit deduction period for 10/15 pay date: 10/2 - 10/15
• Life Event date entered: 10/1/24

In this case, the employee submitted a life event to add coverage, backdated to 10/1/24. This falls within the previous pay period, which has already been paid. As a result, the employee owes an additional amount on top of the standard deduction.

How to View the Breakdown:

1. Click on the New Deduction amount to see the detailed breakdown by pay period.
2. You'll see the following columns:
   • Dates: The relevant pay period dates.
   • Deduction Period: Either the standard deduction or prorated deduction in a time frame.
   • Amounts: Deduction amounts for the period and a total deduction amount.

For instance:

• On 10/1/24, the prorated deduction is $0.08, since it only applies to 1 day of the previous pay period.
• For the 10/15/24 pay date (the current period), the standard deduction is $1.26.

The total amount the employee owes for the 10/15/24 pay period is $1.34, which includes both the standard and prorated deductions.

Next Pay Period: In the following pay period, the Old Deduction will reflect the catch-up amount, and the New Deduction will show the standard amount.

Reimbursement Scenario

When an employee has coverage removed, deductions may need to be reimbursed for past payments.

Example Scenario:

• Pay date: 10/18/24
• Benefit deduction period for 10/15 pay date: 10/5 - 10/18
• Life event: Coverage removed, effective 9/23/24
• Prorated amount*: $11.16 for coverage from 9/21 - 9/22 (this is the deduction amount they should pay instead of the full standard deduction)
  
  

*In the previous pay period (10/4 pay date), the employee still had benefit coverage for two days (9/21 and 9/22), which explains the prorated amount you'll see below. You can click into the Payroll Schedule Preview at the top of the dashboard for a full list of pay dates and periods. 

Understanding the Reimbursement:

1. You'll see a line labeled Amount Deducted from Employee: -$223.74. This was the standard deduction for the benefit that was taken from the employee's paycheck on 10/4/24.
2. GoCo calculates that the employee should be deducted $11.16 for the two days of coverage, but reimbursed $212.58 for the remaining period when coverage was no longer active.

As a result, $212.58 should be reimbursed to the employee.

For any additional questions, we’re happy to help! Reach out to us at support@goco.io 💚