The Pay Types desktop is where pay type information is configured in OnTarget. Pay types define and control the way that employees or contractors get paid through OnTarget. With pay types, the parameters for tax handling, any overtime calculations, interaction with timesheets, pay rates, and any linking with wages expense and general ledger are defined.
In order to search for pay types, click on “Search Pay Types”. This populates a search grid with various filters that can help with searching. Here, filters can be used to search by pay type description, tax handling, and pay type among others.
In order to add a pay type, click on Add Pay Type. This opens the pay type configuration window.
First, enter a description. This should be a description that is consistent with the type of payment to be made. For instance, if this pay type is going to be for training, the description could be entered as “Training”. It is recommended to set up a pay type for each of the billable service categories that are provided. The benefit to that is that after each payroll run you can get an overview of the wages paid per service. Pay type descriptions should also be indicative of any special tax handling, so that the users know how to apply the pay types correctly to staff based on the way individuals need to be taxed. Contractor pay is a great example since contractors are not taxed typically. Specifying any tax considerations in the pay type description will help to ensure proper tax handling of staff pay.
Next, select the tax handling. If the pay type should be subject to tax, select “Subject to All Taxes”. If the pay type is not subject to tax, as in Mileage and Contractor Pay for example, select “Subject to None”. Other tax handling variations are available as well.
In the next section, select a pay type setting. This selection determines how OnTarget handles the processing and calculations for a particular pay type. For example, if the pay is based on an hourly wage, select the “Hourly Rate” pay type. This will require all time to be entered by start and end times. All time for billable services must be against a pay type with an hourly pay type setting as this is the mechanism for importing time into payroll. Salaried staff will most likely need a pay type with the Salary setting. With this pay type setting, start/end times are not entered, rather a unit of “1” is entered against the pay type in which the associated salary amount per paycheck is configured. The “Mileage Reimbursement” pay type allows the number of miles to be reimbursed to be entered against the pay type. The “Bonus Commission, Lump Sum” and Misc. Expense Reimbursement settings allows a unit of “1” to be entered against the pay type with a pre-defined dollar amount. Sick, Vacation and personal pay types should be setup to match the respective company leave policies. If policies exist for all 3 types of paid time off, then a pay type should be setup for each. The pay type will work off of the leave policy so that balances can be managed when time is taken off and paid out.
A Default Amount is a required field for entering a pay type. When a default amount is entered, it will automatically pull to an employee record when the pay type is added. If there is no default amount associated with a particular pay type, enter a default amount of “0".
Click on the “Pay Overtime” checkbox if the hours to be paid against the pay type should be eligible for overtime. “Include in Overtime Calculation” instructs the system to include the hours against the pay type in the overtime calculations. This should be checked if the time worked for the pay type should be included in the overall eligible for overtime calculations.
The final checkbox is “Allow Manual Timesheet Entry”. If this checkbox is selected, time can be manually added against the pay type on a timesheet. This is a great control point for the timesheets. This is mostly used to ensure that time against billable services don’t get added manually to a timesheet; rather, the time is imported directly from the note or clinical documentation. Typically, only pay types that would capture non-billable time are checked here.
Finish setting up the pay type by adding any default general ledger expense account information. Select the associated Wage Expense account as applicable along with any other tax related accounts. Note: accounts are setup by going to Configure, List Configuration, Global, Chart of Accounts. Click Save. This is the integration of payroll wages to General Ledger. Every time paychecks are cut, the wages are reported to the GL automatically through this setup.
After pay types have been created and defined, it is time to add the pay types to the employee record(s).
First go to employees and search for or add an employee. Open the employee record and Click on the Pay Types tab. click “Add”.
Next, select the pay type from the “Business Pay Type” drop-down. Type auto-populates based on how the pay type was configured at the Pay Types desktop. Select the associated cost center the employee will be working the time against the pay type. Note that if an employee works in multiple cost centers the pay type can be added multiple times to reflect each cost center worked. This is important in reporting payroll wages to the GL by cost center correctly.
If the pay type that you are entering is associated with a billable service and a specific rate is associated with services rendered for a particular client, select a corresponding client from the “Client” drop-down. If the employee will work with multiple clients at the same rate, there is not a need to add the client. Only when there are client specific rates. Select a service only if the pay type is associated with a billable service, this is very important for the import of notes/timesheets to payroll as well as GL reporting by service.
If a default amount was not set at the pay type configuration (or you need to change a default rate), enter the pay rate here. Enter an overtime amount if applicable. Next (if applicable) click the +/- button to add a date range and rate for a pay type. This is where you can specify a date range for a particular rate associated with a pay type.
Click on the “Inactive” checkbox to inactive a pay type. To see any inactivated pay types, click on the “Show Inactive” checkbox at the top right of the window. Check the “Default” checkbox to set a particular pay type as a default. Delete is available for pay types that have not been used for a particular employee.
Click “Update” to save the pay type to the employee record, or “Cancel” to exit out.
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