Accumulated employee benefit amounts to be paid by the employee can be collected through EFT directly from the employee’s bank account instead of placing the employee in arrears and collecting the money from the employee.
Depending on the Bank, there are two options for processing PAD:
Option 1: Debits are included on the regular Payroll EFT file with employee payments (Credits). Each pay period would be submitted individually through the payroll process, and all employees with PAD Deduction amounts for that pay period would be included on the file. Banks which do not allow Debits and Credits to be sent in the same file will not accept this method.
Option 2: Debits can be submitted on their own using the Pre-Authorized Debit File Generation process. This is run outside of the pay steam and can be processed for multiple payrolls at the same time. This process also allows for employee selection for situations such as missed or rejected payments when only one or a few employees’ debits need to be submitted.
It should be noted that when either method is used, the amount collected is not reported in the employee’s history, only the amount calculated for the PAD Deduction. If a PAD submission fails for a specific employee, the Pre-Authorized Debit File Generation can be run again for that employee and pay period to recover the missing funds.
PAD Setup
The following set up will need to be completed to activate the PAD feature:
System Maintenance > Payroll Database Maintenance > Deduction Code Additions
A new Group 0 Type 4 Special Pre-Authorized Debit Deduction Code will need to be created.
Group 0
Type 4
Freq as appropriate
Table N
Arrears S
Zero Balance Y
Arrears Deduction 99 (or as appropriate)
Deductions field should include all the deduction codes that make up the amount the employee is to pay or have the debit entry created for.
External Name: This field is set up differently depending on which PAD process is being run:
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If running PAD through the payroll stream, this must be filled in with the key word “EFT” to trigger the generation of Debit EFT entries from this Pre- Authorized Debit deduction to the payroll EFT Bank file.
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For the Pre-Authorized Debit File Generation process, which is run outside of the payroll stream, this field does NOT need to be defined.
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System Maintenance > Payroll Database Maintenance > Banking Constants Changes
Transaction Code Debits
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Enter the CPA (Canadian Payment Association) code to be used for bank Debits. As with the Transaction Code Deposits field, this code should be confirmed with the receiving bank. The system default is 450 Miscellaneous Payments.
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This field value is only used if the Pre- Authorized Debit deduction is in use and needs to be filled in if the Pre-Authorized Debit is active for EFT (in other words, if PAD is being run through the payroll stream). Banking Constant fields including the Transaction Code Deposits field are prompted through the PAD Generation process but will by default pull from the payroll’s Banking Constants
For further details regarding this page, including fields specified by bank, please refer to Banking Constants.
Demographics > Employee Changes
The deduction code created above will need to be manually added to each applicable employee’s Deduction screen.
Generate Payroll > Pay Estimate Inquiry
The employee will no longer be placed into arrears, but rather the money owing will go to the Pre-Authorized Debit deduction code.
Option 1: PAD run through the Payroll Stream
Generate Payroll > Payroll Stream > Pay Report Output Review
When PAD is run through the Payroll Stream, the last page of the Electronic Bank Transfer Report will now report the Total Bank Debits and Total Employees as well as a Grand Total Bank and Grand Total Employees.
Generate Payroll > Electronic File Processing
The Bank File Merge will also break out the debits from the credits to clearly show you the total credits and total debits.
Option 2: Pre-Authorized Debit File Generation
Generate Payroll > Electronic File Processing > Pre-Authorized Debit File Generation
The Pre-Authorized Debit File Generation process allows users to generate a bank file containing the Debit entries of the Pre-Authorized Debit (PAD) deduction for a range of pay periods for a single payroll or for multiple payrolls. Although some banks will allow for Debit entries to be included in the same bank file as the Credit entries, other banks will not. This process gives users the option to generate a bank file containing only Debit entries while at that same time controlling the Transaction Date, Client Number and Account number values used in the generation of the bank file. The debit entry value will be taken from the employee’s accumulated history for the range of pay periods defined, based on the PAD Deduction which must be a Group 0 Type 4 deduction. Zero or negative balance debit entries will be omitted and reported in the processing log.
There is an option to select specific employees + payroll ID. The default should be All Employees but this feature can be used for situations where there is a need to reprocess for only one or two employees that were either not setup correctly originally or where the Debit failed at the bank and needs to be redone. Note that selected employees without a PAD balance will be omitted from being reported.
This Pre-Authorized Debit option is available for all the following banks, based on the BANK PROGRAM defined under the User Specific Parameters Profile:
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Alberta Treasury (96)
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CIBC (80)
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CUCORP (1464)
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Bank of Montreal (80)*
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Bank of Montreal (1464) *
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Scotia Bank (80)
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Royal Bank (152)*
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TD Bank (80)*
*= Bank will ONLY accept pre-authorized Debits in a separate file from Credits. For these banks, the Pre-Authorized Debit File Generation MUST be used.
This Pre-Authorized Debit file generation process allows the user to define the 6 characters of the bank file name to be used with a PAD extension. It is recommended to use at least a two-digit incrementing number as part of the bank file name. For example, BMDT01.PAD.
The debit bank file will be generated at the location pointed to by the SRB$OPSWRK logical of the current payroll. The debit bank file is then available for downloading for submission to the bank via the Payroll Download File Process.
This process should be run in batch so a log is generated in the event of any errors.
Default Prompt Storage & Retrieval
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This process includes the option to maintain multiple sets of stored prompts. Please note some banks require different values for the PAD file versus the Payroll file. The stored prompt feature provides the ability to override the applicable prompts from the Payroll Banking Constants and recover the prompt set each time.
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Name the prompt sets by defining a title up to 10 characters, with a 30-character description.
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On the first prompt, click the Report Defaults icon to select an existing set of prompt values. You can delete prompt sets or change the description from the Report Default icon.
Pad File Name To Be Used For This Generation
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Enter the pay period to be used in the definition of the merged bank file name. A warning will appear, and the user given the option to overwrite the file, should a file already exist in this payroll by this name.
PAD Payroll Selection
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Enter the Payroll ID, Start Period, End Period, and list of PAD deductions to be included in this process for each applicable payroll.
Bank Sequence Number
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Enter the next bank sequence number to be used.
PAD Transaction Date
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Enter the date the funds are to be withdrawn.
Bank Client for PAD Debits
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Enter the Bank Client number to be used. The initial default will be pulled from this payroll’s Banking Constants, although this value may be overridden and stored for future use.
Institute ID For Returns on PAD Debits
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Enter the Bank ID number of the bank to which returns are sent, supplied by the bank. The initial default will be pulled from this payroll’s Banking Constants, although this value may be overridden and stored for future use.
Account Number for Returns on PAD Debits
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Supplied by the bank and is the account number for returns. The initial default will be pulled from this payroll’s Banking Constants, although this value may be overridden and stored for future use.
Transaction Code for PAD Debits
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Enter the CPA code to be used for Bank Debits. The system default is 450 Miscellaneous payments. The initial default will be pulled from this payroll’s Banking Constants, although this value may be overridden and stored for future use.
Report All or Selected Employees
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Enter ‘A’ to include all employees with a PAD balance for the selected payrolls, per pay period range. Entering ‘A’ will clear any previously selected employees.
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Enter ‘S’ to select individual employees plus pay ID to be included in the PAD file generation. Enter the employee number followed by the appropriate payroll ID code. Use the lookup to search all employees and select the appropriate employee + payroll ID.
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Employees can only be chosen if in a payroll ID which has been selected for this processing of PAD.
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Select the View Employee icon to see a listed of selected employees.
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Select the Clear icon to clear all selected employees.
The report lists the following:
Report header lists the bank and debit file name, bank sequence number, transaction date, client number, Inst. Return and Account (when applicable) Client Name (when applicable) and transaction code.
Payroll ID
Employee number and name
Control Number
Employee’s bank and transit number
Employee Bank Account number
Employee’s debit amount
Subtotal by payroll ID
Grand totals of debits and number of entries