Overview
Payroll items and pay codes define the building blocks of payroll. They control what can appear on payroll transactions, such as basic pay, overtime, allowances, benefits, deductions, or other recurring payroll values.
Main purposeSet up the earning and deduction lines used in payroll processing.
Important areasPayroll item list, payroll item details, employee assignment, and payroll entry usage.
Business valueCleaner payroll setup, more reliable salary processing, and clearer reporting by pay type.
Where To Find It
Common Path: Employees > Payroll Items
Users usually create payroll items before entering payroll transactions or assigning employee payroll settings.
Note: Payroll design varies by company policy, so the exact payroll items used in one company may differ from another.
How It Works
Each payroll item represents a type of payroll amount or rule. Once created, it can be assigned to employees or selected during payroll processing according to the company payroll structure.
- Payroll items should be clearly named so payroll users understand them immediately.
- Some payroll items represent earnings, while others represent deductions or adjustments.
- Consistent payroll item design improves payroll reporting and reconciliation.
Main Areas
| Area | What It Is Used For |
|---|---|
| Payroll Item List | Review, open, and create payroll items or pay codes. |
| Payroll Item Details | Define the item name, type, and payroll behavior used by your company. |
| Employee Assignment | Used when payroll items are attached to particular employees. |
| Payroll Entry Usage | Payroll items appear during payroll transaction processing. |
Important Fields And Controls
| Field Or Control | What It Means | When To Use It |
|---|---|---|
| Payroll Item Name | The label used in payroll setup and processing. | Use a clear name such as Basic Salary, Transport Allowance, or Deduction. |
| Type / Category | The broad payroll classification. | Use it to separate earnings, deductions, or other pay structures. |
| Active Status | Shows whether the item can still be used in current payroll work. | Use inactive status when retiring old pay items. |
| Employee Assignment | The employees linked to the payroll item when needed. | Use this when the item applies to selected employees rather than everyone. |
| Description | Extra explanation about the payroll item. | Use it when payroll users need more context. |
Recommended Workflow
- Create the payroll item from the Payroll Items list.
- Enter a clear payroll item name and choose the correct type or category.
- Save the item and review whether employee assignment is needed.
- Use the payroll item in payroll settings or payroll transaction processing.
- Mark old payroll items inactive when they should remain in history but not in new payroll work.
Best Practice
- Use consistent naming so payroll items are easy to recognize.
- Avoid duplicate pay codes that mean the same thing.
- Review payroll items before each major payroll cycle or policy change.
- Use inactive status instead of deleting payroll items with history.