Setting Up and Managing Deduction Dates with BambooHR® Payroll

Purpose: To show you how to effectively manage benefit deductions when using BambooHR® Payroll.

Table of Contents

Benefit plan setup

When setting up a new benefit plan, you will need to determine when the benefit deduction starts (payroll deduction rule) within the Payroll Deduction step. 

The payroll deduction rule will be editable up until the first deduction approval, even if you have enrolled employees in the plan. Once the first deduction is approved in Payroll, the payroll deduction rule will no longer be editable for that specific plan. If edits are needed, you will need to end the current plan and create a new one with the updated deduction rule.

Please keep in mind that the deduction rules are tied to the benefit start date. The start date is based on when the plan takes effect for the individual employee and will automatically adjust for new hires or if the start date is updated on the employee profile.

After you make your selection, a preview box will show you an overview of deduction frequency based on the pay schedule selected, including the deduction start and end dates and how many pay dates the deduction is active for. This preview feature is dynamic and will change according to what you select. 

The system will also show an informational message if your selected deduction frequency overlaps with deductions from another benefit plan. 

You can adjust the pay schedule (e.g., Every other week) next to "Preview" to preview deduction dates and the number of pay dates based on the pay schedule. All your pay schedules that sync to Payroll will appear in this dropdown menu. 

HSA and FSA plans will not have pre-pay options, meaning you can only set them up to pull the first deduction after the employee's effective enrollment date.

If necessary, you can override the deduction start date on the employee profile. However, the deduction rule set up on the plan level will still apply. Navigate to the employee's Benefits tab, locate the plan, and click Edit Enrollment from the gear dropdown menu. Then, choose the new deduction start date and click Save.

If a benefit plan does not have an end date, the preview box will not display an end date for the benefit plan or the deduction.

Deduction date FAQ

In general, if a benefit plan start/end date lands on the same day as the pay date, the correct deduction start/end date rules mentioned above will apply. The following scenarios address unique cases. 

  1. When will the deduction happen if a benefit plan’s start date lands on the employee's first pay date if I have chosen First Pay Date after the Benefit Starts?
    • The deduction start date for the employee will be the same as the benefit plan’s start date.
  2. What will happen if I move the benefit plan’s start date back in time, and I have chosen to have the deduction to start one pay date after? 
    • The deduction start date will adjust to match the new benefit start date. This ensures that the deduction will still be active for the first payroll.
  3. If my employee is included in an off-cycle payroll, will that pay date be included in the deduction start/end date calculation? 
    • No. Off-cycle payrolls will not be included when determining the first or last deduction date. 
  4. This year, there is an extra Friday or pay date. When will the deduction end date be calculated?
    • If the benefit plan is in a year that has an extra Friday or pay date, then the correct number of pay dates is calculated for a typical year. This means the deduction may end a pay date early, but the correct amount of money will still be deducted. 
  5. I've chosen to end deductions two pay dates after the plan’s end date, but I moved the benefit plan’s end date forward. How will this affect the final deduction date calculation?
    • The deduction end date will adjust to be included in the payroll. This ensures that the deduction will still be active for the last payroll.
  6. How are final deduction dates determined?
    • The deduction start date determines the deduction end date for employees who are no longer enrolled in a plan. In this case, the deduction end date will be one pay date before the one indicated in the rule, and the effective date will be based on the coverage termination date. The exception to this is if an employee is terminated or resigns. Then, the deduction end date will be determined based on their final pay date, and the following rules will apply:
      • Active deductions that have no end date are set with an end date that matches the final pay date. 
      • Active deductions that have an end date after the final pay date are changed to match the final pay date.
      • Active deductions that have an end date before the final pay date are not changed. These deductions will end naturally before the final pay date.
Deduction Start Date Selection Deduction End Date
Two Pay Dates Before the Benefit Starts The deduction will end three pay dates before the benefit's end date.
One Pay Date Before the Benefit Starts The deduction will end two pay dates before the benefit's end date.
First Pay Date After the Benefit Starts (most common) The deduction will end one pay date before the benefit's end date.
Two Pay Dates After the Benefit Starts The deduction will end one pay date after the benefit's end date.

Editing deduction dates

To override the default deduction start and end dates for an individual employee, navigate to their Pay Info tab. 

Under the Deductions section on the Pay Info tab, click on the pencil icon next to the plan name. You can also terminate coverage and manage the deduction end dates by clicking X next to the plan name. Performing these actions will bring up a modal for you to select the right deduction start and end dates.