Taxable Earning Pay Codes

Bonus -Taxed as Regular Income

Bonus payments made to employees

These bonus payments should be made as part of the regular payroll check.

Y

Y

box 1, 3, 5

Bonus -Taxed as Supplemental

Bonus payments made to employees

Typically bonus payments identified separately and taxed as supplemental earnings.

Y

Y

box 1, 3, 5

Health Care Premiums -Domestic Partner(Employer)

Federal law requires that premiums for health insurance for domestic partners is taxable. This code adds the employer contribution to the earnings for taxation. A deduction code needs to be set up to offset the earnings.

Select an after-tax deduction code such as Misc. After-tax Deduction to offset this earning.

Y

Y

box 1, 3, 5

Holiday

Code to track payments made for holiday pay

These payments are reported as regular earnings.

Y

Y

box 1, 3, 5

ISO -Ordinary Income

W-2 income resulting from a disqualifying disposition of EE stock originated from a company's stock option plan. See IRS pub 525.

An offsetting deduction can be used if you would like to record the ISO through payroll rather than directly paying it to the employee.

N

N

box 1, 16

Overtime Premium

Overtime Premium earnings

Overtime Premium is used to pay overtime hours at 0.5 x standard pay rate. In case of Double time, the Overtime Premium Code should be used to pay overtime hours at 1 x standard pay rate.

Y

Y

box 1, 3, 5

For Alabama: box 14 only

Overtime Straight

Overtime earnings paid at straight time

This code pays overtime at the regular hourly rate. Hours entered here are also reflected in overtime premium.

Y

Y

box 1, 3, 5

For Alabama: box 14 only

Paid Time Off -Taxable

Code to track payments made for any paid time off

These payments can include vacation and sick paid time off in accordance with company policy and are reported as regular earnings.

Y

Y

box 1, 3, 5

Personal

Code to track payments made for any personal time off

This tracks personal time off in accordance with company policy. Payments are reported as regular earnings.

Y

Y

box 1, 3, 5

Regular

Code for regular time worked

These payments are reported as regular earnings.

Y

Y

box 1, 3, 5

Retroactive Pay

Code for back pay owed to an employee

These payments are reported as regular earnings and taxed at supplemental rates. If combined with regular earnings, these payments will be taxed at regular rates.

Y

Y

box 1, 3, 5

Severance

Code for pay owed to an employee at termination

This tracks termination pay in accordance with company policy. In most cases, termination is non-voluntary. Payments, when not combined with regular pay, are reported as supplemental earnings for withholding purposes.

Y

Y

box 1, 3, 5

Sick Pay

Code to track payments made for any sick time paid by employer

This tracks regular sick time in accordance with company policy. Payments are reported as regular earnings.

Y

Y

box 1, 3, 5

Supplemental Pay

Pay for other than regular hours worked

These payments are reported as regular earnings and taxed at supplemental rates.

Y

Y

box 1, 3, 5

Unpaid Hours

This is a memo field

Use this field to track any hours not yet paid.

Y

Y

box 1, 3, 5