Additional earnings are available to help separate pay for things like meals or vehicle allowances. They're easy to set up. Visit Company > Earnings > Other Compensation, then click the Add Other Compensation button. You may set them up as needed. Each earning only needs to be set up once, and you are not required to use it. We recommend that you consult with your accountant before using these earnings.
NOTE: Once you run a payroll using an additional earning type, you may edit the description, but you are not permitted to delete the earning until the beginning of the next year. The earning must remain available because it is active for reporting purposes for the current year. Additional earnings may be deleted if they have not been used to pay an employee.
Additional Earning Types Available
Auto Allowance (Taxable)
Fully taxable compensation for the value of personal use of a company vehicle. This is not added to net pay. The employee must be paid enough salary or hourly wages to cover the taxes due. Displays in W-2 boxes 1, 3, 5 and 14.
Auto Allowance (Not Taxable)
Non-taxable pay that reimburses the employee for business-related auto expenses (such as car rental, out-of-pocket car repair, mileage, gas, etc.). Added to net pay and does not display on the W-2.
Clergy - No Tax Withheld
Used to pay clerics/ministers (as defined by the IRS in Publication 517). Clergy earnings include the cleric’s salary/wages, income from offerings and fees received for services performed, and non-accountable travel and auto allowances. Clergy earnings should not include reimbursements or money used toward taxable, non-accountable expenses, such as childcare.
By law, social security and Medicare cannot be withheld from cleric’s earnings even if the cleric requests the employer do so. This earning type also does not withhold federal and state income taxes or local taxes, which clerics may elect to withhold. Clergy - No Tax Withheld earnings are reported in W-2 Box 1.
Clergy Taxable
Used to pay clerics/ministers (as defined by the IRS in Pub. 517). By law, social security and Medicare are never withheld from cleric’s earnings. This earning type is used to pay clerics that voluntarily want to withhold federal income tax (FIT) and state income tax (SIT) from their earnings. Clergy Taxable earnings report in W-2 Box 1. FIT withheld reports in Box 2. Wages subject to SIT report in Box 16. If local taxes exist, local taxable wages report in Box 18.
Upon request by the cleric, the religious organization may withhold federal and state income taxes from the cleric’s earnings by entering into a “voluntary withholding” arrangement with the organization and submitting a W-4 form to the IRS. Clerics are responsible for filing quarterly returns to pay their combined tax liability. See Online Help key word “clergy” for more information.
Housing Allowance (for Church Payroll ONLY)
A housing allowance is provided to a cleric for use toward the cost of retaining and maintaining the residence the cleric owns and resides in. It may be the fair rental value of the cleric’s residence or an allowance used towards mortgage or rent. The amount may include utilities and other costs related to maintaining the residence. The housing allowance is excluded from cleric’s gross income, thus reducing the clergy taxable wages in W-2 Box 1. The clergy housing allowance reports in W-2 Box 14.
The religious organization must officially designate the housing allowance in advance of providing it to the cleric. If no value or cash amount was officially determined in advance, the cleric must include the value or amount in their gross income.
“Housing Allowance” is used when the residence is owned or rented by the cleric, but the church provides the cleric cash toward retaining and maintaining the residence. Online payroll support this type of clergy housing allowance.
“Housing Parsonage Allowance” is used when the residence is owned by the religious organization and NOT by the cleric. The residence is provided to the cleric as part of their compensation. We do not support housing parsonage allowances because they are not actual earnings (and thus, are not processed through payroll).
Fringe Benefit (Taxable)
Fully taxable compensation that has a monetary value and is a benefit provided by the employer, but it does not affect wages. This amount will be included in the employee’s taxable wages, but it will NOT be included in net pay. The employee must be paid enough salary or hourly wages to cover the taxes due. Amount will display in W-2 boxes 1, 3, 5 and 14.
Fringe Benefit (Not Taxable)
Non-taxable compensation that has a monetary value and is a benefit provided by the employer, but it does not affect wages. Is not subject to ANY taxes (federal, state, or local), and is not included in the employee’s net pay. Since this earning is not included in net pay, it does not report on the W-2.
Fringe Benefit (FICA Tax)
A fringe benefit from which all taxes are withheld EXCEPT for federal and state income taxes. This earning is taxed for social security and Medicare (which together make up "FICA"). Fringe (FICA) earnings are not included in net pay. The employee must be paid enough wages to cover the Fringe (FICA) taxes due. Displays in W-2 boxes 1, 3, 5, 14, and 16.
Group Term Life Insurance
Taxable portion of employer-paid life insurance premiums for coverage in excess of $50,000. GTL is not included in net pay. The employee must be paid enough salary or hourly wages to cover GTL taxes due. Displays in W-2 boxes 1, 3, 5, and 12-Code C. State taxable wages report in Box 16. If local taxes exist, wages subject to local tax will appear in Box 18.
Holiday
Fully taxable holiday pay provided in a dollar amount (may be used for such things as New Year’s Day, Christmas Day, Thanksgiving Day, Easter, etc.).
Meals (Not Taxable)
Non-taxable compensation used to account for meals the employer provides to an employee as non-taxable fringe benefits. This amount is not added to taxable wages, so it does not report on the W-2.
These meals are provided by the employer free or discounted to the employee. In the following circumstances, meals provided by an employer to an employee are excluded from the employee’s taxable wages and are NOT considered income per federal law:
The meals were provided in kind, meaning, not provided in the form of cash given to the employee (cash provided for meals is not excludable under IRC section 119).
The meals were provided to an employee on the employer’s business premises and for the employer’s convenience (such as during or immediately before or after an employee’s working hours, when the employee is required to remain on the business premises, or when the employee’s duties require them to be on call for a business reason and remain on the premises during the meal period).
The meals are infrequently provided and are of minimal value; therefore, they may be excludable as de minimis fringe benefits.
Meals (Taxable)
Fully taxable compensation used to collect taxes due for non-excludable (taxable) meals provided to an employee by an employer. Added to all taxable wages, but not to net pay. The compensation amount will display in W-2 boxes 1, 3, 5 and 14.
Taxable meals are considered income for an employee and may be a part of wages or compensation if mutually agreed upon by the employee and employer in the contract of employment. Check your state’s rules regarding the maximum value of meals allowed per day.
Specific conditions determine whether the meals are taxable or non-taxable (excludable). Employee meals are included in the employee’s gross income and are subject to tax withholdings UNLESS any of these exceptions apply:
The meals were provided in kind, meaning, not provided in the form of cash given to the employee (cash provided for meals is not excludable under IRC section 119).
The meals were provided to an employee on the employer’s business premises and for the employer’s convenience (such as during or immediately before or after an employee’s working hours, when the employee is required to remain on the business premises, or when the employee’s duties require them to be on call for a business reason and remain on the premises during the meal period).
The meals are infrequently provided and are of minimal value; therefore, they may be excludable as de minimis fringe benefits.
Miscellaneous (Not Taxable)
A total of five (5) of these additional earnings are available for your use. Miscellaneous (No Tax) earnings are used to pay your employee nontaxable compensation, which does not report on the W-2.
Miscellaneous (Taxable)
A total of five (5) of these additional earnings are available for your use. Miscellaneous – Taxable earnings enable you to pay your employee fully taxable compensation. This earning reports on the W-2 in the same way as regular earnings.
Moving Expense (Not Taxable)
Compensation as reimbursement for excludable or qualified moving expenses for moving or relocation. This is a non-cash earning and will not be reflected in Net Pay. Non-taxable amount displays in W-2 box 12-Code P.
Moving Expense (Taxable)
Taxable portion of employer-paid moving or relocation expenses not considered deductible by the employee. The employee must be paid enough salary or hourly wages to cover the taxes due. This is a non-cash earning and will not be reflected in Net Pay. Compensation displays in W-2 boxes 1, 3, 5 and 14.
Other (Not Taxable)
Used to pay an employee a non-taxable amount that is NOT an actual earning. The amount is not added to taxable wages, so it does not report on the W-2.
Per-Diem (Not Taxable)
Non-taxable portion of employee business expense or reimbursement. Displays in W-2 box 12-Code L.
S-Corp 2% Owner
Taxable compensation for the value of employer-paid accident and health insurance premiums for employees with 2% or more ownership in an S-Corp. This earning is exempt from social security taxes, Medicare taxes, and Federal Unemployment Tax (FUTA). Displays in W-2 Boxes 1 and 14.
Service Charges
Fully taxable compensation used to pay an employee for mandatory gratuities charges added to patrons’ bills by restaurant management. Added to all taxable wages and to the net pay. The compensation amount will display in W-2 boxes 1, 3 and 5.
Third-Party Sick Pay
Third-Party Sick Pay is when an employee receives payment from a third-party insurance company or other agent of the employer in place of wages. It is not paid directly by the employer. An insurance company paying short-term disability is an example of Third-Party Sick Pay. It is fully taxable compensation, included in the employee's gross taxable wages, but will not be added to their net pay. Employers should consult with their accountant before using this earning.
Tips (Cash)
Fully taxable compensation reported by the employee for gratuities given by patrons. Added to all taxable wages but not to net pay. It must be entered with enough additional employee pay to cover taxes due. The compensation amount will display in W-2 boxes 1, 5 and 7.
Tips (Credit Card Owed)
This earning is used to pay an employee the tips they are owed for gratuities charged by patrons and collects the taxes due for the compensation. It is fully taxable compensation included in the employee's gross taxable wages and added to their net pay. The amount is reported in the totals of Form W-2 Boxes 1, 5 and 7. Note: Does not include allocated tips (reported by the employer in W-2 Box 8). Uncollected social security tax is reported in Box 12, Code A. Uncollected Medicare tax is reported in Box 12, Code B.
Tips (Credit Card Paid)
Fully taxable compensation used to pay an employee for tips already cashed out to the employee from gratuities charged by patrons. Added to all taxable wages but will not add to net pay. It must be entered with enough additional employee pay to cover taxes due. The compensation amount will display in W-2 boxes 1, 5 and 7.
Tips to Minimum
Fully taxable compensation that can be used to pay an employee when the reduced cash wage combined with tips received do not equal the federal or state minimum wage (whichever is higher). Added to all taxable wages and to the net pay. The compensation amount will display in W-2 boxes 1, 5 and 7.
Vacation
Fully taxable holiday pay provided in a dollar amount (may be used for such things as New Year’s Day, Christmas Day, Thanksgiving Day, Easter, etc.).