Within this article you will have a complete guide to LMN Payroll Codes!
Select from the list below to jump to its spot within the article!
- Payroll Codes [Overview]
- Payroll & Overtime Settings
- Payroll Codes: Setup [By Job & Job Type]
Payroll Codes [Overview]
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
- 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.
- Select the Settings wheel at the bottom left area of the screen
- Click on Payroll Codes Lister under Timesheets.
- Click on +Add New 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, you will notice there are 3 different areas where you can set up Payroll Codes:
- On your Payroll Settings;
- On your Job Types;
- On a Job itself
To understand the hierarchy of how these three interact, refer to the chart below:
Payroll & Overtime Settings
Your LMN Payroll settings is where you setup your overtime rules, and the default payroll codes to be used when creating jobs.
In this guide you will learn to:
Setup your company's overtime rules:
- Weekly overtime
- Daily overtime (if applicable)
- 7th day overtime (if applicable)
And set up your default (base level) payroll codes for hourly, overtime, and salary workers.
Setting up your Payroll & Overtime Settings will help determine when/how to track your employees hours accurately.
- Select the Settings wheel at the bottom left area of the screen.
- To edit each setting, select the drop-down menu and toggle to your desired selection (Yes or No).
- For some of the settings, if 'Yes' is selected, you will then be prompted to enter the value you desire.
- Each section will feature a button next to each section; hover your mouse over this button to view a description/explanation.
The descriptions can also be found below:
Default Payroll Codes
If you are using QuickBooks, you will assign a Payroll Code to be used by default for your Hourly, Overtime and Salary wages.
Payroll Codes: Setup [By Job & Job Type]
You have the ability to override your Payroll Codes on a per Job basis if required. Setting up your Payroll Codes within a Job will override the Payroll Codes that have been assigned as per the Job Type for the job in question.
This will enable you to pay employees different wages for different types of jobs/work – especially handy if you pay premium rates for snow and ice work.
- To assign specific Payroll Codes for a Job, access the Job in question and select Payroll on the top menu.
- Here you will notice that the Payroll Codes being used for Hourly, Hourly Overtime, and Salary
- To assign a new Payroll Code to each wage, click on the drop-down menu next to each wage you wish to edit and select the new Payroll Code(s).
- Click Save.
- Wages can also be set to the Job Type Default if these are left blank (to review which Job Type this job has been allocated to, click on the Overview tab on the top menu).
To set up your Job Type level Payroll Codes:
- Select the Settings wheel at the bottom left area of the screen and select Job Types
- Here you can either +Add New or you can select an existing Job Type to open it
- Select the Payroll tab and then you can set the Payroll Code at the Job type level, or leave it as Account Default (Account Default will pull from your Payroll Settings, the base level on the Payroll Hierarchy)
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