Understanding Pay Type Setup

You set up pay types to categorize various employee earnings to direct labor to different accounts in the general ledger. You can define up to 999 different pay types, using the range of numbers 001 to 999. For example, most companies need to set up different pay types for holiday, sick, and vacation or personal leave pay.

Setting up pay types also allows you to:

• Define how different pay types are used when you compute employee pay.

• Assign automatic pay methods for autopay employees.

• Enable leave tracking.

• Define a pay type to be tax exempt.

• Define information to be printed on 1099 and W-2 forms for the associated pay type for U.S. payroll.

• Define whether hours and dollar amounts should be passed to the general ledger.

• Define how the system retrieves employee pay, deduction, benefit, and accrual (PDBA) history for each pay type.

You can also attach a media object to a pay type for explanatory notes or other information. If you attach a text media object to the pay type, the first two lines of text that you enter appear on reports that include the pay type description.

When you set up a basic pay type, you define the minimum amount of information that the system needs to perform the calculation.