Zenefits automatically defaults to 2x the normal deduction amount when determining per-paycheck adjustments. Deductions adjustments will never exceed 2x the normal deduction amount unless requested by an administrator.
If the default catch-up amount causes financial hardship to under-deducted employee, administrators can contact Support to request a reduction as:
For employees in synced payroll or Zenefits Payroll, a new hire's deductions for a particular benefit will normally appear in the first paycheck after the effective date for that benefit. However, if an employee enrolls after their effective date and misses the first payroll run, then a pending deduction adjustment will generate. Learn more about how Zenefits determines deduction adjustments.
For companies who use File Sync or Payroll Reports, the timeframe is the same: new deductions will appear in the Deductions report for the period that contains the first paycheck. The pending deduction adjustment tool is not available for File Sync or Payroll Reports. More information about reviewing employee deductions.
In general, changes to deductions due to enrollment changes (e.g., for a qualifying life event) will be applied on the first of the month after the date of the change. However, the actual timeline can vary by carrier so it's best to check with your broker if you have any questions.
In general, when an employer makes changes to their health insurance contributions, the date when employees' deductions will update to reflect the change depends on when the company pays its premiums.
Deductions for employees going through Open Enrollment will start at different times, depending on the particular circumstances:
In some months of the year, there are 5 pay dates for employees paid weekly. Zenefits does not push normal deductions for these employees in the 5th paycheck, so there's usually no cause for alarm in this case. Learn more.
In most case, a new hire's deductions haven't yet begun because their effective date(s) for benefits are in the future. Zenefits begins deductions in the paycheck that follows the effective date.
Other reasons for delayed deductions include:
If for some reason deductions don’t make it into payroll on time, Zenefits will automatically calculate catch-up deductions.
Deduction amounts for each paycheck may change as a result of many factors, such as:
In addition, Zenefits rounds deductions to the nearest cent. A slight variance from pay period to pay period to account for rounding is common.
Deduction adjustments are temporary increases (or decreases) in per-paycheck deductions to resolve differences between how much an employee has paid to date for their benefits and how much these benefits actually cost.
Differences can be caused by multiple reasons, such as:
Assume the following example.
Deductions can't start until coverage is approved, even if the approval date is later than the effective date. The employee then had coverage for a month without paying premiums. Adjustments (sometimes, double deductions) are required because the employee now owes $360 for the previous month's coverage in addition to the current month's premiums.
When Zenefits detects that an employee was under-deducted for their benefits, payroll administrators can make their own adjustments in payroll, or use the adjustment plans that Zenefits automatically calculates to temporarily increase their deductions until the difference is repaid.
Each adjustment plan has 3-4 stages:
In some months, there is a third paycheck for bi-weekly employees and a fifth paycheck for weekly employees. If these employees have catch-up deductions, up to 2x the normal deduction amount will be taken from the third or fifth paychecks. Any deduction amounts in these paychecks are 100% catch-up deductions.
An employee with a normal semi-monthly deduction of $100 ($200 monthly) was under-deducted $120 for the previous month, and will have $320 in deductions over the next two paychecks to catch up.
|1st paycheck||$200 ($100 x 2)||$20|
|2nd paycheck||$120 ($100 + $20)||$0|
An employee with a normal weekly deduction amount of $80 ($320 monthly) was under-deducted by $180 for the previous month, and will have $500 in deductions over the next four paychecks to catch up.
|1st paycheck||$160 ($80 x 2)||$100|
|2nd paycheck||$160 ($80 x 2)||$20|
|3rd paycheck||$120 ($80 + $20)||$0|
An employee with a normal bi-weekly deduction amount (by Zenefit's Method 1 for bi-weekly deductions) of $100 ($200 monthly) was under-deducted by $400 for the previous month. If current month has three paychecks, this employee will have $600 in deductions in the next three paychecks.
|1st paycheck||$200 ($100 x 2)||$300|
|2nd paycheck||$200 ($100 x 2)||$200|
An alternative to manually reimbursing over-deducted employees in payroll is to have Zenefits calculate and apply an adjustment schedule for "reverse" adjustments, which reduce the employee's deductions for one or more paychecks until the amount they would have been deducted (without the reduction) is equal to the amount they overpaid.
Zenefits can only schedule and push reverse adjustments for employees with future deductions that are greater than $0. Employees with no future deductions, such as those who've retroactively cancelled their benefits, must be reimbursed manually in payroll.
An employee with a normal semi-monthly deduction of $100 ($200 monthly) was over-deducted $120 for the previous month. Their deductions will be reduced over two paychecks before returning to normal.
|1st paycheck||$0 ($100 - 100)||$20|
|2nd paycheck||$80 ($100 - 20)||$0|
An employee with a normal weekly deduction amount of $80 ($320 monthly) was over-deducted by $180 for the previous month. Their deductions will be reduced over four paychecks before returning to normal.
|1st paycheck||$0 ($80 - 80)||$100|
|2nd paycheck||$0 ($80 - 80)||$20|
|3rd paycheck||$60 ($80 - 20)||$0|
An employee with a normal bi-weekly deduction amount of $100 ($200 monthly) was over-deducted by $350 for the previous month. Their deductions will be reduced over four paychecks which normally have deductions.
|1st paycheck||$0 ($100 - 100)||$250|
|2nd paycheck||$0 ($100 - 100)||$150|
|3rd paycheck||$0 ($100 - 100)||$50|
|4th paycheck||$50 ($100 - 50)||$0|
Zenefits automatically calculates adjustment plans for employees who were under- or over-deducted for their benefits. Click Deduction Adjustments on the Deductions page to use the Deduction Adjustments tool and manage over- and under-deducted employees by approving or declining Zenefits' suggested plans.
Under-deducted employees were not deducted enough to cover the cost of their benefits.
For these employees, click:
|to approve the adjustment, and have the employee to pay back the difference. Zenefits will automatically increase their deductions (as catch-ups) over a specified number of pay periods, then return them to normal deductions. Read an explanation of how Zenefits calculates catch-ups.|
to decline the adjustment. By this method, you can either manually make adjustments in payroll, or "forgive" the amount entirely by paying the difference on behalf of the employee. Zenefits will make no changes to the employee's deductions.
Over-deducted employees paid more than the cost of their benefits, and should receive the difference as a reimbursement.
For these employees, click:
|to approve an automatic adjustment. Zenefits will automatically decrease their deductions over a specified number of pay periods, then return them to normal deductions. Read an explanation of these adjustment plans.|
to decline the automatic adjustment. You'll need to manually reimburse the employee through payroll. Zenefits recommends this method because it is the fastest way to reimburse the employee up-front.
Your decisions to approve or decline an adjustment only take effect once you click Apply Decisions. Prior to that, you can undo each decision, or Reset All to undo all pending decisions.
Let's walk through an example:
Employee A's medical deduction was under-deducted by $150.
Adjust deduction from $100 to $200 for 1 pay period, then $150 for 1 pay period?
If the adjustment is:
Zenefits is unable to sync deduction information to payroll during the block period. If a company is in this block period, any pending deduction adjustments an admin may have seen in their Deductions App will be removed until the block period has ended. There is no need to panic. This is how the product is supposed to work.
The block period is 2 days before the check date and the actual check date.
For example, if the next check date for a company is the 15th, the pending adjustments will disappear from 13th-15th and reappear on the 16th.
**If outside the block period, pending Deduction Adjustments will appear as normal**
If you are an employee and do not see the correct deductions for insurance, please bring this up to the attention of your HR administrator for additional clarification.
If you are an HR administrator looking for additional clarification, please bring this to the attention of your broker contact.
If you enrolled in a Commuter, FSA, HSA, or HRA plan, and believe your deductions are incorrect, please make note of the date you made the change.
If you still believe your deductions are incorrect, please speak with your HR representative to reach out to Support.
If you're an employee and do not see the correct deduction for 401(k), please bring this up to the attention of your HR representative. Remember that the IRS sets annual limits for how much can be contributed to these accounts.
If your HR representative identifies an issue, please have them reach out to Support for further assistance.