We know that every small business is different, and there’s a variety of ways you need to pay your staff. Creating payments in PaySauce is incredibly flexible, and there are plenty of different ways you can structure payments to meet your needs. When you first add an employee, you’ll typically set them up with a base pay rate as either an hourly rate or a salary, though we know some employers pay piece rates or other rates that aren’t necessarily bound to time worked. PaySauce can support both of these setups.
We also know that there’s lots of other allowances or payments that you might want to add into how your employee is paid, so in this article we’ll cover the basics of the PaySauce payment set up as well as examples of common payments.
Overview of payment types and settings
Every time you create a payment in PaySauce, you give it a ‘rule’. These different payment types are used for different needs, and we’ll summarise the available options here.
Payment rule
The payment rule is what determines what kind of payment you are creating and how it will function.
Payment rule name | What it does |
Hourly | Hourly payments are used for specifying a rate per hour worked |
Salary | Salary payments are used for specifying an annual salary.
Can also be used for a ‘period’ salary, where you specify the value per pay period rather than the annual value. Most employers would apply the annual salary, as it is more easily understood by employees and far easier for your reporting. |
Fixed amount | Fixed amount payments are used to specify a fixed dollar amount that is added to each pay run.
These payments can be set to either taxable or non taxable, and they can also be excluded from KiwiSaver calculations (specifically for those payments which should not be included in KiwiSaver). |
% gross taxable | % gross taxable payments allow you to specify a percentage which will be added to each pay run based on the specified percentage of the gross taxable in the pay period.
You can specify a maximum value.
These can be set to taxable or non taxable. |
Rate and quantity | Rate and quantity payments are similar to an hourly rate but not recorded as hours worked, this specifies a specific value for each ‘amount’ that is added.
This is often used for piece or pick rates. You would typically use this in combination with another rate that recorded the employee’s time worked as well. |
Lump sum payment | Lump sum payments are used for one off payments. These are also called ‘extra pays’. They use a different tax method as set out by the IRD (more information here.
Lump sums should not be used for regular allowances (use fixed amount instead for regular payments), but can be used for irregular payments (such as a quarterly bonus). |
% ordinary pay | % ordinary pay payments are similar to % gross taxable, but calculates the value based only on ‘ordinary earnings’ rather than the full gross taxable value. |
Hourly (with top up) | Hourly with top up payments are used for when you want to top up salaried or piece rate employees to minimum wage. Refer to our ‘Top ups’ article for more information. |
Fixed amount (+GST) | Fixed amount (+GST) is used for GST contractors when you want to pay the GST value through payroll as well.
The GST portion is automatically calculated for you at pay time as a non taxable payment. |
PayCard Topup | PayCard Topup is used when you want to top up salaried or piece rate employees to minimum, living or custom specified rates. Refer to our ‘Top ups’ article for more information. |
Frequency
Most payment types that you create will need a specified frequency. You select from either regular or variable.
Regular: the payment will be automatically included in each pay run.
Variable: the payment will be specified in each pay run as needed. Depending on the payment type, a rate will be brought through to each pay run but not the quantity/number of hours.
Taxable or non taxable
Most payment types can be set to either taxable or non taxable. Most payment types are taxed. Non taxable payments are those that are ‘reimbursing’ in nature. PaySauce support can’t generally offer you advice on whether or not your payment is taxable or not: we recommend you chat to your accountant or the IRD for advice specific to your situation.
ℹ️ IRD publishes good guidance on allowances and how to handle them - read more here.
Template
Templates are settings created at a company level that can apply to timesheets or jobsheets. Once you have set up a template at a company level, e.g. for entering timesheets, you will select it for the relevant payments that you create. You can read more about timesheet templates in our timesheet article.
Reduce by leave taken
This check box should be enabled for when you are paying someone a regular payment, such as a salary or fixed number of hours, and you want that payment value to be automatically reduced when leave is added to the pay run.
Setting up new payments
You can create payments from both the employee settings area as well as the pay run area. We recommend using the employee’s settings area to create or edit ongoing payments, and using the pay run area to create or edit payments as a one off.
Change employee payment settings
Go to the Employees section on the left hand side menu.
Select the employee’s name from the list, then select the ‘Payments’ tab.
Start a new payment by selecting the plus icon on the right, or edit an existing payment by clicking on the name of the payment.
Remove a payment by clicking on the cross to the right of the payment line.
Edit or add payments in your pay run (make a one off payment)
If you need to add a payment in one pay run and you don't want that payment to recur again, you can edit your employee payments directly from the pay details. This is useful for when you want to add backpay, bonuses or missed allowances or correction payments.
Your employee’s pay should be in the ‘data entry’ state. If it is calculated, return it to data entry by clicking on the arrow in the top left corner of their pay card.
While in data entry, click on the employee’s name on the pay card.
Select the ‘payments’ tab.
Create or edit the payment that you wish to add.
Select 'one off' for the frequency so the payment does not recur.
If you want to pay your employee backpay in a lump sum, you should select the payment rule 'lump sum' and include the payment in leave earnings.
Using the 'fixed amount' payment rule is often also suitable for entering one off values in your pay run. These can be taxable or non taxable. Taxable fixed amounts will always be included in employee leave earnings.
Common payment types
Here's a summary of some of the other payment types (other than salary or hourly rate) we often see set up in PaySauce.
Payment type | How it is set up |
Reimbursements, expenses | A reimbursement for expenses is typically set up as a non taxable fixed amount as required, for example creating it from within the pay card. |
Mileage | A mileage payment is usually set up as a non-taxable rate x quantity payment with the rate fixed (for example as the rate per km), but not the quantity. The quantity can be added as needed for the total km. |
Rent or accommodation allowance | A rent or accommodation allowance is typically set up as a regular fixed amount allowance, taxable but excluded from KiwiSaver. There is also usually an associated deduction for the same value. |
Regular allowances for work equipment such as tools, uniform, wet weather gear | Depending on the nature of the allowance and the guidance given to you by IRD or your accountant, regular allowances are set up as either taxable or non taxable fixed amount payments, using the fixed amount payment type. Sometimes tool allowances are paid per hour, in which case it may be set up as a rate x quantity payment. |
Piece or pick rates | When you pay an employee a production type payment (work done rather than for the time worked), these are typically set up as rate x quantity payments.
Multiple payments can be set up for different types of work with different rates, and the rate can be entered each pay.
There is usually an associated hourly payment (which can be set to zero if needed) so the employee’s time can be recorded separately. |
Contractor payments | Invoiced totals from contractors can be paid using either fixed amount or fixed amount + GST as required.
Contractors paid by the hour can be set up with an hourly rate. |
Overtime | Overtime rates are typically set up as an additional hourly rate. This can be applied to employees on either salaries or hourly rates.
The overtime hourly rate can be set to a separate required value as needed.
Multiple overtime payments can be set up. |
Call out fees | Call out fees are typically set up using rate x quantity payments, with the rate fixed and the quantity entered as needed. |
Commission | Commission payments can be set up a variety of ways depending on the agreement.
Commission paid irregularly may be paid using a lump sum payment included in leave earnings and KiwiSaver.
Commission paid regularly would typically be paid using a fixed amount or rate x quantity payment. |
Backpay | Backpay values that are calculated to give an employee a missed amount of earnings from over a period of time should be taxed using the lump sum/flat rate method, so these should be loaded as lump sum payments. |