Setup Considerations: Flexible Payment and Deduction Options
You can use this topic to help make decisions when planning your configuration and use of flexible payment and deduction options. It explains:
- Why to set them up.
- How they fit into the rest of Workday.
- Downstream impacts and cross-product interactions.
- Security requirements and business process configurations.
- Questions and limitations to consider before implementation.
Refer to detailed task instructions for full configuration details.
What They Are
In Workday, flexible payment and deduction options provide a centralized business process to manage workers' loans, advances, donations, and other payments and deductions through payroll.
In Workday, flexible payment and deduction options provide a centralized business process to manage workers' loans, donations, and other payments and deductions through payroll.
Business Benefits
Payroll administrators can use flexible payment and deduction options to:
- Review workers' requests, including status and outstanding balances, at any time.
- Record a flexible payment and deduction on behalf of a worker, saving time by bypassing approvals.
- Set limits on each request type, giving you control over when a worker can make a request and how much they can request.
- Configure a goal or target amount as correctable, helping you avoid manual overrides and adjustments.
Workers can use the feature to:
- Request their own payments and deductions, saving you time and reducing manual processing.
- View the status of their requests and balances at any time, saving time you might otherwise spend responding to questions.
Use Cases
Set up flexible payment and deduction options for:
- Advances that workers can request for vacations, to repay on their regular payslip.
- Loans that workers can request for vacations, to repay on their regular payslip.
- Charitable donations where the worker specifies a total amount and deduction schedule.
- The cost of company-issued uniforms that the worker pays over time.
- Cycle-to-work schemes that reduce the worker's pretax pay.
Questions to Consider
Questions | Considerations |
|---|---|
What types of flexible payment and deduction options do you want to support? | You can set up flexible payment and deduction types for different use cases, such as loans, charitable contributions, and equipment reimbursements. Each type can have different options and limits. You can also set up unique earnings and deductions for each type. |
Do you want to make a payment to workers that they’ll repay? | Configure a flexible payment and deduction type with both an earning and a deduction. |
Do you want to enable workers to request goal or target amounts (deductions that aren't repayments)? | Configure a flexible payment and deduction type with only a deduction. |
Do you want to be able to correct goal or target amounts for workers? | You can configure a goal or target amount as correctable, which enables you to change the target amount even after running several pay completes.
The deduction amount doesn't update automatically, but you can change it manually when you’re correcting the business process. You can't access or update the number of installments because Workday doesn't store this information. |
Do you need to support salary sacrifice for a flexible payment and deduction option? | You can create an earning with the calculations normally used for deductions (a negative earning). Select it as the deduction when you create the flexible payment and deduction type. |
Do you want to limit worker requests to a certain period of time? | You can configure payment and deduction types with an available date range. |
Do you want to limit the number of simultaneous flexible payment and deduction requests that a worker can have? | You can configure a flexible payment and deduction type to enable only 1 active request at a time. The worker can't request that type again until Workday fully deducts the active request.
You can't automatically prevent workers from requesting a different flexible payment and deduction type, but the approver can reject the request. |
Do you want to enable workers to request ongoing deductions? | Flexible payments and deductions are for a defined amount and number of installments. You can use the voluntary deductions feature to enable ongoing deductions with no specified end date. |
Recommendations
To improve usability, create custom labels to replace the Workday default labels on flexible payment and deduction options tasks and reports.
Create keywords in your tenant to help workers find flexible payment and deduction options tasks and reports.
Requirements
Create dedicated pay components for flexible payment and deduction options.
Limitations
This feature doesn't support:
- Proration, except for leave of absence subperiods.
- Retroactive loans and advances.
- Tracking or recouping arrears.
- Payroll history payments.
- Payroll reversals.
- Ongoing payroll inputs.
- Input from payroll input workbooks.
- Creating or updating flexible payment and deduction transactions using payroll input web services.
- Interest charges on outstanding balances.
Workday doesn't support net pay validation for flexible deductions, which can reduce net pay below the selected minimum net pay amount even if you assign them the lowest priority order on the
Maintain Deduction Priorities
task. However, doing so can help you ensure that net pay validation iterates over the other deductions. You can also:
- Correct the goal or target amount for flexible deductions configured as correctable.
- Use payroll input to reduce the flexible deduction amount for the pay period.
Workday doesn't store the number of installments for flexible deductions. The goal, target, or deduction amount is deducted in every pay period until its outstanding balance reaches zero, regardless of the number of installments initially selected.
Workday doesn't support flexible payment and deduction options for workers:
- On international assignment.
- In third-party payroll pay groups.
- Who relocate from a Workday Payroll supported country to a nonsupported country.
Workday doesn't convert the currency on existing flexible payment and deduction requests when a worker moves from 1 Workday Payroll country to another. You can either:
- Manually calculate the balance and installment amounts in the currency of the new country and correct the transaction.
- Add a one-time payroll input to offset the original amount and recreate the transaction in the currency of the new country.
You can't set up flexible deductions for pretax deductions if you have also enabled Ongoing Multiple Work Jurisdictions (OMWJ).
Tenant Setup
You can use the
Edit Tenant Setup - Search
task to create keywords to help workers find the flexible payment and deduction options tasks and reports. Example: Loan, Advance, Goal, Balance.Security
Configure these domains in the Core Payroll functional area:
Domains | Considerations |
|---|---|
Process: Flexible Payments and Deduction Options Management | Enables you to use web services to process flexible payment and deduction transactions. |
Report: Payroll (Flexible Payments and Deduction Options)
| Enables you to view workers' flexible payment and deduction transactions. |
Self-Service: Payroll (Flexible Payments and Deduction Options)
| Enables workers to view their own transactions. |
Set Up: Payroll (Flexible Payments and Deduction Options)
| Enables you to create and edit flexible payment and deduction types. |
Business Processes
Configure the
Request Flexible Payment and Deduction Options
business process security policy to:
- Identify the security groups that can request, approve, and take other actions on a request.
- Set up notifications to let workers know when you take action on their requests.
Don't set up step conditions that bypass the approval step. You need to specify the payment and first deduction periods when you approve the request.
Reporting
Reports or Dashboards | Considerations |
|---|---|
My Flexible Payments and Deductions worklet | Enables workers to:
|
Pay dashboard | You can add the My Flexible Payments and Deductions to the Pay dashboard to enable easy worker access. |
View Flexible Payments and Deductions report | Use to view flexible payment and deduction events.
From the related actions menu of an event, you can:
Use the Payment/Deduction Type ID from the report as a payroll worktag when you:
|
Flexible Payment and Deduction Options
report data source to create custom reports on flexible payment and deduction events. Integrations
Web Services | Considerations |
|---|---|
Get Flexible Payment and Deduction Event
| Use to retrieve requests from Workday. Example: To get data from a previous bulk load that you need to rescind. |
Import Flexible Payment and Deduction
| Use to bulk load requests. Example: A company-wide donation campaign. |
Import Payroll Off-Cycle Payment
| Use to bulk load replacement or additional payments for flexible payment and deduction events. |
Connections and Touchpoints
Features | Considerations |
|---|---|
On-demand payments | Use to pay a flexible payment request before the next payroll payment date. |
Payroll input | Use to adjust existing flexible payment and deduction requests. |
Manual payments | Use to adjust the balance of an existing flexible payment and deduction when the worker makes a payment outside of payroll. |
Payslips | Earnings and deductions that you configure for flexible payments and deductions display on worker payslips. |
Workday offers a Touchpoints Kit with resources to help you understand configuration relationships in your tenant. Learn more about the Workday Touchpoints Kit on Workday Community.