Earning Components
Earning Components define categories of compensation and determine how each is taxed according to tax laws and regulations.
Below are descriptions of Zeal's earning components and how they are taxed:
Earning Type | Description | Wage Type |
---|---|---|
Advance | An advance is a form of loan or payment where money or goods are provided before any return consideration is received. Advanced earnings are taxed the same as regular earnings. Advances are not exempt from any specific tax types. | Regular |
Cash Tips | Tips that an employee has received in cash prior to their paycheck date. Cash tips will be taxed normally, but will not be included in the employee net pay because they have already received them. Cash tips are not exempt from any specific tax types. | Regular |
Charged Tips | Tips that an employee has not yet received. Paycheck tips will be taxed normally and will also be included in the employee net pay. Example being credit card tips. Charged tips are not exempt from any specific tax types. | Regular |
Commission | Payment to an employee based on commission. Commission earnings are taxed differently than regular earnings. They are taxed at a jurisdiction's supplemental rate when applicable. Commission earnings are not exempt from any specific tax types. | Supplemental |
Commodity | Commodity wages, also known as "in kind wages", are a way for agricultural producers to compensate employees by transferring ownership of a commodity (such as hay, cattle, etc) to them instead of paying cash. Commodity wages are not subject to FICA taxes, Federal or State unemployment taxes, and no federal/state income tax is withheld (although the wages are subject to these tax types). | Commodity |
Correction | Correction wages are a negative gross pay amount meant to represent a correction to a shift were an employee was previously overpaid. The employer enters the correction as a positive number and it will convert the number entered into a negative gross pay amount. | Other |
Discretionary Bonus | Bonus payment to an employee given at the sole discretion of the employer. The key is that the employer hasn't set the expectation of a bonus if employees meet certain goals. Bonus earnings are taxed differently than regular earnings. Discretionary bonuses are not exempt from any specific tax types. | Supplemental |
Double Time | Any hours worked by the employee that constitute double overtime. Overtime earnings are taxed the same way as regular earnings. Double time is not exempt from any specific tax types. | Regular |
Flat | A way to pay an employee a set gross amount, without consideration for hourly rate or hours worked. Flat earnings are taxed the same way as regular earnings. Flat earnings are not exempt from any specific tax types. | Regular |
Gross Up | Gross up allows an employer to enter what they want an employee to be paid out in net wages and automatically calculates the gross pay needed to achieve the desired net pay. Gross up wages are taxed the same way as regular earnings. Gross up earnings are not exempt from any specific tax types. | Regular |
Group Term Life Insurance Cost Over 50000 | For most employees, the imputed cost of coverage in excess of $50,000 for Group Term Life (GTL) must be included in income. The total can be calculated using the IRS Premium Table. GTL imputed income amounts are subject to social security and Medicare taxes. | Other |
Holiday | Any hours worked by the employee on a holiday. Paid holiday earnings are taxed the same way as regular earnings. Holiday earnings are not exempt from any specific tax types. | Regular |
Hourly | Regular hours worked by hourly employees. Hourly earnings are not exempt from any specific tax types. | Regular |
Nondiscretionary Bonus | Bonus payment to an employee offered by an employer if employees meet certain requirements. These are usually standing offers that help incentivize better performance in the workplace. Nondiscretionary Bonus earnings are taxed the same way as regular earnings. Nondiscretionary Bonuses are not exempt from any specific tax types. | Regular |
Overtime | Any hours worked by the employee that constitute overtime. Overtime earnings are taxed the same way as regular earnings. Overtime earnings are not exempt from any specific tax types. | Regular |
PTO | Paid time off (PTO) describes time for which an employee is paid, but during which they did not work. PTO earnings are taxed the same way as regular earnings. PTO earnings are not exempt from any specific tax types. | Regular |
Piecework | Work where the employees are paid at a fixed piece rate for each unit produced. Piece earnings are taxed the same way as regular earnings. Piecework earnings are not exempt from any specific tax types. | Regular |
Reimbursement | Money given to an employee to reimburse the employee for self paid job related expenses. A reimbursement is not taxable. | Non-Taxable |
Sick | Paid time during which the employee was not working due to sickness. Sick earnings are taxed the same way as regular earnings. Sick pay is not exempt from any specific tax types. | Regular |
Vacation | Vacation pay is compensation that employees receive while they take time off from work for vacation. Vacation earnings are taxed the same way as regular earnings. Vacation pay is not exempt from any specific tax types. | Regular |
You can see how to include earning components in the Shifts API here.
Updated 2 months ago