A child support variation code is used if you regularly deduct child support from an employee's wages, but the amount deducted in a certain pay period is different from the usual deduction.

The variation code is communicated to the IRD on either your printed or electronic employer's monthly schedule.

When deducting child support, the law requires the deduction to be such that it leaves the employee with no less than 40% of their nett pay, not counting any student loan deductions. This is called the employee's "protected earnings".

Ace Payroll manages protected earning automatically, and will never deduct an amount of child support that would touch an employee's protected earnings.

Furthermore, if Ace Payroll does this it also automatically adds the correct variation code to the employer monthly schedule.

There may be cases where you want to manually adjust an employee's child support deduction.