If you pay employees by piece rate, you can set up a custom pay item to account for wages by units completed. You can even display the piece count on employee pay statements.
Creating a "Piece Rate" pay item
Go to Company, then Pay Items, and look for an unused "Custom" field.
Click to update the name to "Piece Rate" or something similar.
Decide whether this pay item should operate as an hourly or non-hourly pay type.
"Hourly" vs. "Non-Hourly"
Hourly
Setting up piece rate pay as an hourly pay item lets you enter pieces completed as hours in OnPay when running payroll. OnPay uses the pay rate assigned to the worker to calculate their wages based on the number entered when processing payroll. OnPay is unable to monitor minimum wage compliance when using an hourly piece rate pay item.
- Disables OnPay's ability to monitor minimum wage compliance
- When processing payroll, you enter the piece count for each employee in the "hours" field
- OnPay calculates total pay for pieces completed based on the employee's pay rate
- The number of pieces is automatically displayed on pay statements, along with the piece rate
Non-Hourly
When setting up a non-hourly pay item for piece rate pay, you're able to enter the total pay for pieces completed as a flat rate, and notate the piece count and piece rate separately. OnPay is able to monitor minimum wage compliance based on total pay over hours worked within the workweek.
- When processing payroll, total pay for pieces completed is entered as a flat amount
- Piece count and rate is manually entered for each worker
- Regular rate and wages are displayed separately from piece rate pay
- Piece rate and count are displayed in the memo field of pay statements
Adding piece rate pay to employees
Go to Compensation in the profile of each employee paid by piece rate.
Click the blue (+) to add a pay type.
Search for and select your piece rate pay type.
Click Add.
Enter the amount this employee is paid per-piece in the field. This piece rate will now be available for this employee when running payroll.
Hourly piece rate payroll workflow
Piece rate pay can be added to employees while processing a pay run. For this example, we have an employee whose rate is $0.50 per piece.
Click the edit pencil for the employee's wages.
If an hourly piece rate pay item has been added to the employee, you can enter the piece count in the "Regular (hr)" column. OnPay will calculate the employee's piece rate by the number entered, and display the total under "Amount". In this example, the piece rate in the employee's profile is $0.5 per piece, so entering 1,000 pieces populates the total pay amount as $500.
If using "hourly" piece rate pay types:
Using hour-units to represent pieces will prevent OnPay from monitoring your compliance with federal, state, and local minimum wage requirements.
Non-hourly piece rate payroll workflow
Another way to include piece rate pay information on pay statements is with a Flat Rate pay type. For this example, we have an employee whose rate is $0.50 per piece.
When processing payroll, the flat Rate pay type will have an override switch, which allows you to enter the total dollar amount to be paid for pieces completed within the pay period.
Because this employee completed 1,000 pieces at $0.50 per piece, you'll divide total pieces by their rate (1,000 รท 0.5 = 500), and enter the total of 500 in the "Override rate" field. Next, you'll add the number of pieces completed and the rate per piece to their pay statement.
Adding pay information to the pay statement
Because this is a flat rate of pay, an extra step is needed to add the required pay information on their statement.
Click More.
Click Memo/Note.
Write out the number of pieces completed, and the rate per piece in the "Check Memo" field. This information will appear on the pay stub and digital pay statements.
v7.25