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Add or change pay types

SOLVED•by QuickBooks•452•Updated 4 days ago

Learn how to set up additional pay items in QuickBooks Online Payroll and QuickBooks Desktop Payroll. And how to handle pay types you don’t use anymore.

On top of your employee’s regular salary or hourly rate, you can also add multiple hourly rate/wage, bonus, commission, overtime, and fringe benefits items to pay them.

We’ll show you how to add these pay items in QuickBooks, and what to do if you no longer use them.

Note: Not sure which payroll service you have? Here's how to find your payroll service.

Add or edit pay types in QuickBooks

  1. Go to Payroll, then Employees.
  2. Select your employee.
  3. From Pay types, select Start or Edit.
  4. Select the pay types you want to add or edit:
    • Pay type ▼ for hourly, salary, or commission only.  If your employee has multiple hourly rates, select Hourly 2 or Another hourly pay type. You can rename these hourly pay types.
    • Common pay types ▼ for overtime, holiday pay, bonus, or commission. 
    • Time off pay policies ▼ for paid time off like sick or vacation.  Check out Set up and track time off in payroll to set up or change policies.
    • Additional pay types ▼ for other pay types like tips, reimbursement, allowances, or fringe benefits. 
  5. Enter the rates for each pay type.
  6. You can rename some of the pay types. Select Edit ✎ next to the pay type. 
  7. Select Save.

Step 1. Set up the item

  1. Select Lists, then Payroll Item List.
  2. Select the Payroll Item ▼ dropdown, then New.
  3. Select Custom Setup, then Next.
  4. Select Wage, then Next.
  5. Select the appropriate wage type. 
    • Hourly Wages, then Next. Select the appropriate pay type (regular, overtime, sick, or vacation pay).
    • Annual Salary, then Next. Select the appropriate pay type (regular, sick, or vacation pay)
    • Commission
    • Bonus
  6. Select Next. 
  7. Enter a name for the pay item, then Next.
  8. Select the Expense account where you want to track wages. 
    • For Bonus pay item, leave the Default rate field blank. You can add the rate when you add the item to the employee profile.
  9. Select Finish.

Note: If you have Workers' Compensation and you want to exclude bonus from the calculation. You’ll need to create the bonus payroll item as an Addition with a tax tracking type of Compensation.

Step 2. Add the item to the employee’s profile

  1. Go to Employees, and then select Employee Center.
  2. Double-click the employee’s name.
  3. Select Payroll Info.
  4. In the Earnings section, add the payroll item you created.
  5. Select OK.

Hide or remove pay types or pay items from your employees’ paychecks

You can’t delete pay types you’ve used previously, but you can hide or remove them when not in use. 

There are 2 ways for you to hide unused pay types:

  • Hide the pay types from the Run payroll page
    1. In the Run payroll page, select Customize table.
    2. Select the pay types you don’t use.
  • Uncheck the pay types from the Employee profile page
    1. Go to Payroll, then Employees.
    2. Select your employee.
    3. From Pay types, select Start or Edit.
    4. Uncheck the pay types you want to remove.
    5. Select Save.

Hide or make the payroll item inactive

  1. Go to Lists, then select Payroll Item List.
  2. Right-click the item and select Make Payroll Item Inactive.

Remove the payroll item from the employee’s profile

  1. Select Employees menu,  then Employee Center.
  2. Double-click your employee’s name. 
  3. Select Payroll Info.
  4. In the Earnings section, select the rate (if there's any), and the item name, then press Delete on your keyboard.
  5. Select OK. 

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