Available to Basic Payroll, Full Service Payroll
You can deduct amounts from employee paychecks for various reasons, such as benefits, 401(k) contributions, loan repayments, wage garnishments, or purchases.
💡 Note: Patriot Software does not remit deducted funds to insurers or other third parties. Employers are responsible for making these payments directly. Patriot Software supports integration with SimplyInsured for managing health, dental, and vision plans, providing additional flexibility for employers. SimplyInsured will collect any premiums directly from the employer's bank account.
Understand terms in Patriot Payroll:
“Deductions” reduce an employee’s pay.
Even though traditional vernacular calls what an employee puts into their 401(k) a “contribution” to a retirement plan, it is still a deducted amount from pay, and therefore a deduction in Patriot.
“Contributions” are what employers pay that is beyond employee pay, such as amount the employer pays for health insurance, or a 401(k) employer match. This does not increase an employee’s pay but does appear on the paystub to indicate extra money being spent for the benefit of the employee. See our help article, “How to Set Up Company Contributions.”
Most employee deductions can have an employer contribution, except for Starter 401(k) and Starter Roth 401(k).
If a company contribution is tied to an employee deduction and the employee has no deduction amount (e.g., $0 employee portion), the contribution will not apply. To ensure the company portion is reflected in payroll, create a separate employer contribution that is not linked to the employee deduction.
Adding an Employee-level Deduction
Deductions must first be set up at the company level before assigning them to employees. See our help article Company-level Deductions for more information. After you have set up the deduction at the company level, you can assign it to your employee.
First, be sure to set up your company-level deduction. After you have created that you will assign it to the employee
Go to Payroll > Employee List > {Employee’s name} > Deductions and Contributions
Click +Add a New at the top right of the Deductions section
Click the drop down to choose from the company-level deduction list you have created to assign to your employee
Default fields set on the company-level deduction will populate, but you can override defaults per employee as needed
Fill out the fields as follows:
Deduction: Choose from the dropdown list of company-level deductions. To add a new one, set it up at the company level first
Active: Default is checked. Uncheck to pause/inactivate the deduction
Method: Fixed Dollar or Percent (set at the company level, not editable here)
Type: Defined at the company level (read-only here)
Amount: Enter the deduction amount or percentage. To override the default, select “Use a Custom Amount“
Limits (optional): Define limits for pay date, month, year, or lifetime. Override defaults with “Use a Custom Amount” or leave blank to remove limits. The software will appropriately apply yearly IRS limits for HSA, FSA, 401(k)s, IRAs, etc, deductions
Catch-Up: Select “Yes” if applicable for tax-exempt contributions exceeding regular limits
401(k), 403(b), etc. options include:
No
Yes: 50+ this year
Yes: 60–63 this year (Super Catch-Up).
💡 If you set one deduction to super catch-up all other applicable deductions for the same employee with the setting as “Yes: 50+ this year” will automatically also be treated as super catch-up, although the setting itself does not change on each deduction. Starter 401(k)/Roth Starter 401(k) plans do not qualify for super catch-up.
Starter 401(k), Roth Starter 401(k) catch-up contributions are eligible for employees age 55+ in the current year
HSA catch-up contributions are eligible for employees age 55+ in the current year
Click “Save.”
⚠️ Deduction amounts cannot be changed from the Run a New Payroll screen. To adjust the amount for a specific payroll, you must edit the deduction on the employee record (Payroll > Employee List > {Employee's name} > Deductions and Contributions > Edit) before running payroll.
How to Edit a Deduction on an Employee
Go to Payroll > Employee List > {Employee’s name} > Deductions and Contributions
Click “Edit” to update fields
Click “Save”
How to Delete an Employee Deductions
Deductions already applied in payroll cannot be deleted only inactivated.
Go to Payroll > Employee List > {Employee’s name} > Deductions and Contributions
On the deduction list, find the trash can icon at the end of the deduction row you want to delete
If you do not see a trash can, it is because it has been used in a payroll and cannot be deleted. You will need inactivate the deduction instead
Click “Yes” to confirm the deletion of the deduction
How to Inactivate an Employee Deduction
Go to Payroll > Employee List > {Employee Name} > Deductions & Contributions
Click Edit on the deduction you want to inactivate.
Uncheck the “Active?” status box
Click Save.
Deduction Priorities
When an employee’s paycheck cannot cover all deductions, the system prioritizes deductions based on their order in the list.
Go to Payroll > Employee List > {Employee Name} > Deductions & Contributions
Reordering Deductions
Drag and drop rows using the blue arrows on the left side.
Priority Handling
The system deducts amounts row by row until no pay remains. If the first deduction cannot be fulfilled, it skips to the next, and so on.
Handling Employee Deductions with No Wages
Payroll deductions in Patriot Software require that employees receive wages in the payroll. If an employee has no gross pay (e.g., during disability leave), deductions cannot be processed. In such cases, any owed premiums must be handled outside of payroll and collected when wages resume.