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Hourly vs. Salary Employees and How to Edit Their Pay Type and Rate
Hourly vs. Salary Employees and How to Edit Their Pay Type and Rate

When setting up employees, you will select hourly or salary for their pay type and set their pay rate.

Jeffrey Mo avatar
Written by Jeffrey Mo
Updated this week

Fingercheck supports two pay types for employees: hourly and salary.


Pay types

  • Hourly: Also called non-exempt. Hourly employees are paid by the hours worked. The Fair Labor Standards Act (a federal law that sets minimum wage and overtime requirements) gives protections to hourly workers.

  • Salary: Also called exempt. Salaried employees are paid a set wage, which is usually based on an annual figure. These employees are generally not paid for extra hours they work.

You may have a salaried employee who clocks in so that you can stay apprised of hours worked, but the employee is still paid a fixed wage.

Note: In Fingercheck, by default, you cannot pay a salaried employee an hourly wage for extra hours worked (except by special configuration). Reach out to Fingercheck Support if you need assistance with setting this up.


Edit an employee's pay type

  1. Log in to Fingercheck as an Administrator.

  2. Click the EMPLOYEES tab, and click the employee's name or number to open their profile.

  3. Under Personal, click Position & Rates.

  4. Click the Edit icon (pencil) in the Pay Information section to enable editing.

  5. Edit the fields as described in the table below.

  6. Click Save.

Fields

Field

Description

Pay Type

The pay type: Hourly or Salary.

Pay Frequency

How often the employee is paid. The options are:

  • BIWK - Biweekly

  • DAILY - Daily

  • MNTH - Monthly

  • QTRLY - Quarterly

  • SEMI - Semi-monthly

  • WEEK - Weekly

  • YEAR - Yearly

Tax Type

The tax type. The options are:

  • W2 (for employees)

  • M1099 (for miscellaneous income)

  • R1099 (for retirement income)

  • NEC1099 (for contractors; non-employee compensation)

Automatic Paid Hours

The number of hours that are automatically paid each pay period (regardless of number of hours worked).

Excluded Hours from Payroll

Select this option if the hours that the employee works will not be transferred to payroll. Additionally, expense request reimbursements will not go to payroll either.

If you still want to record the pay information for employees like unpaid interns or staff members of temp agencies who receive payment from outside organizations, you can use this option.

Excluded Salary from Payroll

Select this option if the employee's salary should not be automatically processed with payroll.

You might use this option for employees such as unpaid interns or temp agency employees who are being paid by outside agencies, but you still want to record their pay information.

Auto Gross-Up

Select this option if you want to offset income taxes and increase the gross pay to ensure the employee makes the wage you agreed upon.

For example, if you agreed to pay an employee $20 per hour, they would make $800 in a 40-hour week before taxes. If you select Auto Gross Up, Fingercheck calculates the taxes and adds them to the gross so that the employee would receive a net pay of $800.

Workers Comp

A Workers' Comp code. (Fingercheck sets this up for you.) For more information, see How to Assign Workers Comp Class Codes to Employees.

If you are not participating in Workers' Comp under Fingercheck and would like to start, contact us at 1-800-610-9501 to have it added to your plan.

Excluded From Workers' Comp

Select this option if you want to exclude the employee's pay from workers comp.


Here is a short video

explanation:


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