Your payroll codes are used to determine what wages employees are paid for the time they work. You'll note (if you haven't already) that there is no pay or wage information in LMN. That's because LMN exports hours, employees and payroll codes to applications like Quickbooks, or Paychex. Your payroll software reads the employee who is to be paid, then uses the payroll code to determine the applicable wage for those hours.
In this guide, you'll learn:
- What a payroll code is used for
- How to add new payroll codes to LMN Time
- How payroll codes are used in Quickbooks to pay employees the correct wage
Payroll Codes will link to your Payroll Items in QuickBooks. For example, in Quickbooks, employees have payroll codes for hourly and overtime wages. If the employee was paid a 'premium wage' for other work types (like snow or unionized work) - you could setup additional payroll codes for that staff.
Quickbooks example of payroll codes can be found below.
To setup, your Payroll Codes, follow the steps below.
- Click on Settings.
- Click on Payroll Codes on the left-hand menu.
- Click on +Payroll Codes located on the bottom-right corner.
- Give the Payroll Code a name. (TIP: it's recommended you name your Payroll Codes as close as you can to your Payroll Item's in QB to avoid any confusion when running the QB Sync Tool and matching these).
- The Payroll ID is an extra field that could be used in the event you wish to add any extra pertinent information or if your bookkeeper uses IDs in QB to label each Payroll Item. This field is simply for viewing purposes and does not impact any aspect of LMN/QB; it can be left blank.
- Press OK.
You can also setup your Payroll Codes per Job Type and even down to the Job level. For more information on the hierarchy of default Payroll Codes review information below.
The hierarchy of default Payroll Codes
In LMN Time, you will notice there are 3 different areas where you can set up Payroll Codes:
To understand the hierarchy of how these three interact, refer to the chart below: