Additional pay

Overtime hours are calculated at 1.5 times the hourly rate. (For employees with more than one hourly rate, we’ll use the highest rate.) For example, if an employee's highest hourly rate is $40.00, the overtime hourly rate will be $60.00 (1.5 x $40.00).

Double overtime hours are calculated at 2 times the hourly rate. (For employees with more than one hourly rate, we’ll use the highest rate.) For example, if an employee's highest hourly rate is $45.00, the double overtime hourly rate will be $90.00 (2 x $45.00).

Although not legally required by the Fair Labor Standards Act, paid sick leave is offered by many small businesses to remain competitive with other businesses. First, set up paid sick leave as a company policy. Then you can assign the policy to individual employees or to all employees.

Although not legally required by the Fair Labor Standards Act, paid vacation time is offered by many small businesses to remain competitive with other businesses. First, set up paid vacation as a company policy. Then you can assign the policy to individual employees or to all employees.

Holiday pay is compensation for holidays, such as Christmas Day, when a business may be closed and the employee is allowed to take the time off from work.

Compensation that is over and above the amount of pay specified as a base salary or hourly rate.

You might want to give bonuses to thank employees or a team for reaching a significant goal, or to improve employee morale, motivation, and productivity. Bonuses can be distributed randomly as the company can afford to pay a bonus, or as specified by an employment contract.

A form of compensation that's typically based on an employee's sales performance or completion of a task. Commission can be paid in addition to a salary or instead of a salary. Hourly employees who also receive a commission must be paid at least the minimum wage for hourly workers.

A taxable payment to an employee that's separate from regular wages. It's typically paid with each payroll to cover job-related costs, such as uniforms or auto usage, but it's taxable because it's not dependent upon actual receipts. Allowance amounts are not included in the pay base for calculation of percentage-driven deductions such as 401(k).

Reimbursements are nontaxable payments to an employee used to repay business-related expenses that the employee has paid out-of-pocket.

Don't include expenses that have tax implications, such as moving expenses. Typically this includes expenses incurred for limited or regular business travel.

Because these payments aren't taxable, they don't appear on payroll tax or other tax reports, or on W-2 forms. They're also not included in the wage base used to calculate percentage-driven deductions such as 401k amounts. For guidelines on reimbursements, check the Employee business expense reimbursements section of IRS Publication 15, Circular E: Employer's Tax Guide .

You can add multiple reimbursement pay types and keep the default name we provide, or give them each a unique name. In addition to being available for this employee, the custom pay types will also be available when you add or edit your other employees.

Gratuities that are paid to an employee in cash, rather than through their paycheck.

Gratuities that are paid to an employee through their paycheck, rather than in cash.

A payment that you make to a duly ordained minister as a rental allowance for a house, furnishings, utilities, and so on. These payments are exempt from income tax but subject to self-employment tax (calculated and paid by the minister).

Used to report the value of a house, furnishings, utilities, etc. that you furnish to a duly ordained minister as part of the minister's pay. These amounts are exempt from income tax but subject to self-employment tax (calculated and paid by the minister).

A fixed, nontaxable daily allowance to pay for lodging, meals, and incidental expenses incurred during travel. Typically, Nontaxable Per Diem is used in industries in which travel is part of the job, such as truck drivers.

For coverage in excess of $50,000 per employee. Subject to some payroll taxes.

S-corp owner's health insurance is for accident or health benefits provided to 2% shareholders of an S corporation.

It's subject to federal withholding tax, but exempt from Social Security, Medicare, and federal unemployment tax (FUTA). Most states follow the same taxability rules as federal, but there are some states that don't. For details about S corporations, contact your state agency.

The amount you contribute each payday to the employee's health service account (HSA).

For an employee who uses a business vehicle for personal purposes. It's a taxable benefit provided in-kind and you must include the value of the personal use in the employee's wages.

For an employee who experiences the death of a family member or friend and requests time off for a funeral or mourning.

Taxable payments to an employee that are separate from regular wages, such as retroactive pay increases and severance pay. The amounts are included in the wage base and used to calculate percentage-driven deductions such as 401(k).