Earnings rates are the pay rules that determine how much an employee earns for their time. Every line that appears in the earnings section of a pay stub is driven by an earnings rate. Common examples include base hourly pay, overtime, tips, and bonuses.

Each earnings rate defines:

Navigate to Payroll > Payroll Settings > Earnings Rates to view and manage your earnings rates.

This screen lists all configured earnings rates, grouped by earnings type. Click any row to view or edit its settings.

Click + New to open the creation form. Complete the following fields:

Name — A descriptive label that will appear on the employee's pay stub for that earnings line. Keep it clear and recognizable (e.g., "Regular Pay", "Overtime 1.5x", "Tips").

Earnings type — The category of pay. See Earnings types below for how to choose.

Payroll account — The general ledger account this earnings rate posts to. These accounts are configured in Journal Setup.

Pay calculation — How the earnings amount is calculated. Choose one of: Hourly Rate, Multiplier, or Fixed Amount. See Pay calculation types below.

Once you've completed all fields, click Create to save the earnings rate.

The earnings type determines how the IRS classifies the pay and how it interacts with tax calculations and overtime rules.

Regular — Use for all regular, non-overtime wages. This includes base hourly pay, salary, holiday pay, sick pay, and paid time off. Regular earnings count toward the employee's regular rate of pay, which is the basis for overtime calculations under the FLSA.

Overtime — Use for overtime pay required by the FLSA or state law. Standard FLSA overtime is 1.5x the regular rate for hours worked beyond 40 in a workweek. Some states also require daily overtime (e.g., California requires 1.5x after 8 hours in a day and 2x after 12 hours). Set up a separate earnings rate for each overtime tier that applies to your workforce.

Supplemental — Use for supplemental wages such as bonuses and commissions. Non-discretionary bonuses and commissions must be included in the regular rate of pay for FLSA overtime purposes. Discretionary bonuses are excluded from the regular rate.

Tips — Use for tips received by employees, including cash tips and charged tips.

Hourly rate — Pays a fixed dollar amount per hour. Use this for an employee's base pay rate. Enter the dollar amount per hour (e.g., $18.00). Note: when setting up an individual employee's pay, their specific rate is entered on their profile — the earnings rate just defines the type, not the per-employee amount.

Multiplier — Pays a multiple of the employee's base hourly rate. Use this for overtime and other premium pay. Enter the multiplier as a decimal (e.g., 1.5 for standard FLSA overtime, 2.0 for double time). The multiplier is applied to the employee's base rate at the time of the pay run.

Fixed amount — Pays a flat dollar amount regardless of hours worked. Use this for flat bonuses and per-shift allowances. Enter the dollar amount that will apply each time this rate is used.

Two checkboxes control how an earnings rate interacts with time off accruals and overtime calculations:

Accrues leave — When checked, hours paid under this earnings rate contribute to time off accruals for any time off types configured to accrue based on hours worked. For example, if an employee's sick leave accrues at 1 hour per 30 hours worked, only earnings rates with this box checked will count toward that 30 hours. Check this for Regular and Overtime. Typically leave unchecked for Supplemental and Tips.

Blended OT — When checked, this earnings rate is flagged as a blended (weighted average) overtime rule. Select this for any overtime rate that calculates the premium portion of FLSA weighted average overtime.

Here are typical configurations for the most common pay types:

Regular hourly pay

Weighted average overtime

Non-discretionary bonus (e.g., production bonus)

Tips