Payroll Item Types

Deduction

A deduction to the employee's earnings, such as taxes or health insurance premiums.

You can associate this item with a liability account by default. You can use an expense or asset account if the Expand Accounts List for Payroll Items box is checked in Set Up Payroll.

Choose to apply a limit to the deduction for all employees and choose to base this limit on a quantity.

You can derive a deduction from another earning or deduction. You can also derive a deduction from a retirement plan.

Choose to apply a default rate in percent or dollars for the deduction and choose to apply the indicated rate to all employees.

This item is automatically calculated on a paycheck.

Earning:Addition

An addition to the employee's earnings that can be continuous or one-time, such as allowances, bonuses, or holidays.

You can also use this payroll item type to record overtime pay for wage employees.

You can associate this item with an expense account by default. You can use a liability or asset account if the Expand Accounts List for Payroll Items box is checked in Set Up Payroll.

Choose to apply a limit to the addition for all employees and choose to base this limit on a quantity.

You can derive an Earning:Addition from another earning.

Choose to apply a default rate in percent or dollars for the addition and choose to apply the indicated rate to all employees.

This item is automatically calculated on a paycheck if one of the following is true:

• On the employee record, in the Payroll subtab, the Default box is checked beside this item. The Rate and Default Hours specified are added on a paycheck.

• On the payroll item record, Based on Quantity is checked, and time entries for that pay period have been approved.

Earning:Commission

An earning that is given to the employee as commission.

You can use Earning:Commission only if the Employee Commissions feature is enabled in your account. For more information, see Commissions. If the Employee Commissions feature is not enabled in your account, use Earning:Addition.

You can associate this item with a liability account by default. You can use an expense or asset account if the Expand Accounts List for Payroll Items box is checked in Set Up Payroll.

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This item is automatically calculated on a paycheck if the Employee Commissions feature is set up.

If the Default box is checked on the Payroll subtab of the employee record, Rate and Default Hours specified are added on a paycheck.

For wage employees, this item is automatically calculated on a paycheck if time entries have been approved for that pay period.

Earning:Expense

A payment to the employee to reimburse an expense.

You can use Earning:Expense only if you have the Expense Reports feature enabled in your account. For more information, see Expense Reporting. If the Expense Reports feature is not enabled in your account, use Earning:Addition to enter expense reimbursements directly into payroll.

You can associate this item with a liability account by default. You can use an expense or asset account if the Expand Accounts List for Payroll Items box is checked in Set Up Payroll.

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This item is automatically calculated on a paycheck if the employee has filed expense reports.

If the Default box is checked for the Earning:Expense item on the Payroll subtab of the employee record, then Rate and Default Hours specified are added on a paycheck.

Earning:Salary

An annual salary that is paid to the employee on a regular basis. Use Earning:Salary if the employee's pay is based on a set amount and does not use time tracking to pay the employee. Salary is calculated based on the pay frequency chosen on the employee record.

If your exempt employees can earn overtime payments, use Earning:Salary for their regular hours and use Earning:Wage for their overtime pay.

You can associate this item with a liability account by default. You can use an expense or asset account if the Expand Accounts List for Payroll Items box is checked in Set Up Payroll.

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You can derive an Earning:Salary from another earning.

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This item is automatically calculated on a paycheck for salaried employees.

Earning:Sick

An earning that is given toward the employee's sick leave, with the ability to reduce auto earnings and track accrual balances.

You can associate this item with a liability account by default. You can use an expense or asset account if the Expand Accounts List for Payroll Items box is checked in Set Up Payroll.

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You can derive an Earning:Sick from another earning.

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This item is automatically calculated on a paycheck if time entries have been approved for that pay period.

Earning:Vacation

An earning that is given toward the employee's vacation leave, with the ability to reduce auto earnings and track accrual balances.

You can associate this item with a liability account by default. You can use an expense or asset account if the Expand Accounts List for Payroll Items box is checked in Set Up Payroll.

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You can derive an Earning:Vacation from another earning.

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This item is automatically calculated on a paycheck if time entries have been approved for that pay period.

Earning: Wage

An hourly earning that is paid to the employee, such as hourly wages or overtime pay.

If you pay overtime for exempt employees, use Earning:Salary for their regular hours and use Earning:Wage for their overtime pay.

You can associate this item with a liability account by default. You can use an expense or asset account if the Expand Accounts List for Payroll Items box is checked in Set Up Payroll.

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You can derive an Earning:Wage from another earning.

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This item is automatically calculated on a paycheck if time entries have been approved for that pay period.

If the Default box is checked for the Earning:Wage item on the Payroll subtab of the employee record, then Rate and Default Hours specified are added on a paycheck.

Employer Contribution

A contribution made by the employer on the employee's behalf, such as health insurance or a qualified 401(k) plan.

You can associate this item with a liability or expense account by default. You can use an asset account if the Expand Accounts List for Payroll Items box is checked in Set Up Payroll.

Choose to apply a limit to the employer contribution for all employees and choose to base this limit on a quantity.

You can derive an employer contribution from an earning, deduction, or employer contribution. You can also derive it from a retirement plan.

Choose to apply a default rate in percent or dollars for the employer contribution and choose to apply this rate to all employees.

If the employer contribution is derived from a retirement plan, the rate is based on the retirement plan’s matching formula.

This item is automatically calculated on a paycheck.