What are earnings?

In all organizations there are different types of pay for employees. Examples of these are regular hours, overtime, fixed wages, holidays, vacation days, sick days, commissions, bonuses, etc.

In the MSC Payroll payroll platform you can configure these types of income by visiting the area called "Income" within the "Configuration" section.

Once you click on "Income", the platform will take you to a page where you will see all the types of payment configured in the organization.

To view and edit an entry you must click on the "View" button in the column on the right of the entry line. To create a new type of income you must click on the "Add Income" button that is in the upper right part of the page.

What information fields does each entry contain?

Each type of income contains the following information fields:

1. Code - A unique code identifying the entry. Although it is an alphanumeric field, we recommend using three-digit numbers from 101 to 199. This field is used to integrate our payroll platform with Time and Attendance applications. It is a required field.
2. Type - It is a field of multiple options which determine the way in which to proceed with said income. The options are described in a next paragraph.
3. Name - The name with which we identify the entry. Examples of this are: "Regular Hours", "Double Hours", "Time and a Half", "Christmas Bonus"
4. Factor - Factor by which the amount to be paid will be multiplied. For example: regular hours have a factor of 1.0 since their pay is simple, time and a half hours have a factor of 1.5 since the employee's pay is one and a half times the regular pay.
5. Taxable - This information field determines whether the amount of income will be considered to calculate payroll taxes. Examples of taxable income are regular hours, overtime, wages, commissions, etc. Examples of non-taxable income are generally reimbursements made to employees.
6. Valid for vacation accrual - This field indicates whether the hours worked for this type of income will be considered in determining the accrual of employee vacation days benefit.
7. Valid for sick leave accrual - This field indicates whether hours worked for this type of income will be considered in determining the accrual of employee sick days benefit.
8. Valid for christmas bonus accrual - This field indicates whether the hours worked for this type of income will be considered to determine the accumulation of the Christmas bonus for employees.
9. Valid for 401K plan - This field indicates if the amount calculated by this type of income will be considered to determine the contributions to the 401K plan of the employees.
10. Valid for the State Insurance Fund - This field indicates whether the amount calculated for this type of income will be considered to determine the amount to be paid to the State Insurance Fund.
11. Debit Account - The accounting expense account to be debited each time a payment is made for this type of income.
12. Credit Account - The accounting liability account to be credited each time a payment is made for this type of income. ** Note: Income represents payments to employees and these are expenses for accounting purposes. Therefore this field should normally be blank.

How many earning types are there on MSC Payroll?

There are 10 types of income:

1. Per Hour - Are those incomes in which the amount earned by the employee is calculated by multiplying the hours worked by an hourly rate. Examples of these types of income are regular hours, overtime, holidays, etc.
2. Salary - Are those incomes for which the hours worked are irrelevant to calculate the amount earned, since the employee earns a fixed salary. This type of income is generally associated with exempt employees.
3. Allowances - Are those income that represent additional compensation to the employee, generally for the use of assets owned by her. Examples of concessions are "Concession for car use", "Concession for personal telephone use", and so on. It is very important to identify these incomes since in the annual W2 form they are segregated in a particular box.
4. Commissions - Are those income that represent an additional compensation to the rewarded employee her management to generate sales to the company. It is very important to identify these incomes since in the annual W2 form they are segregated in a particular box.
5. Tips - Are those incomes that represent compensation received by the employee as a reward paid by the client in gratitude for the service received. This type of income is common in service companies such as restaurants, transportation services and others. It is very important to identify these incomes since in the annual W2 form they are segregated in a particular box.
6. Sick leave - Are those incomes whose hours are charged against the balance accumulated by the employee for the concept of the pay benefit for sick days.
7. Vacation leave - Are those incomes whose hours are charged against the balance accumulated by the employee for the concept of the benefit of vacation pay.
8. Christmas Bonus - Are those income that is paid to employees according to the Christmas Bonus Law.
9. Refund - Are those income that are paid to employees to return any amount that they have paid in favor of the company. This type of income is typically non-taxable and it is necessary to identify it since in the annual W2 form it is segregated in a particular box.
10. Professional services - These are types of income that are paid to people who are not employees of the company, and therefore are not subject to the same tax rules as regular employees.

What should I do if I have doubts or questions about this topic?

You must send an email to support@mscpayroll.com.