---
title: Creating a Different Pay Rate Custom Pay Type
description: This example shows how to use the taxable allowance custom pay type to set up an additional pay rate for an employee who performs varied roles.
---

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# Creating a Different Pay Rate Custom Pay Type

## This example shows how to set up an additional pay rate for an employee who performs varied roles.

*Updated: December 2024*

You have agreed to additional work for your employee paid at a different rate to their salary or standard pay. Let's break down this example.

| ![Info - Blue Block (1)](https://help.thankyoupayroll.co.nz/hs-fs/hubfs/KnowledgeBase/CalloutIcons/Info%20-%20Blue%20Block%20(1).png?width=50&height=50&name=Info%20-%20Blue%20Block%20(1).png) | Creating separate pay types for different roles will help keep track of budgets and expenditures. [Tracking and Job Codes](https://help.thankyoupayroll.co.nz/en/using-tracking-options-job-codes?hsLang=en) can be tailored to match your reporting needs. Each unique pay type can be reported on by running a [Pay Type Summary Report](https://help.thankyoupayroll.co.nz/en/quick-reports?hsLang=en). |
| --- | --- |

**This allowance is**:

| ❌ | A regular payment I can use [system pre-loaded pay types](https://help.thankyoupayroll.co.nz/en/discovering-pre-loaded-pay-types?hsLang=en) for. |
| --- | --- |
| ✅ | I prefer using a custom pay type for clarity on the payslip or/and **tracking purposes**. |
| ✅ | This is income, taxed as part of the employee's gross wages. |

**The custom pay type & timesheet should have the following**:

| ✅ | Custom pay type created in the **taxable** section. |
| --- | --- |
| ✅ | **Rate**: Employee's agreed job rate\| **Per**: hour |
| ✅ | Hours entered in timesheet. |
| ✅ | This is income \| Taxed as part of gross wages \| Included in leave calculations. |

**Here is an example setup:**

> ![CPT\_OtherJobAllowanceT](https://help.thankyoupayroll.co.nz/hs-fs/hubfs/KnowledgeBase/screensteps/Employee%20Settings/ExampleScenarios/CPT_OtherJobAllowanceT.png?width=608&height=552&name=CPT_OtherJobAllowanceT.png)
> 
> - Create this custom pay type with the job description or name in the Employee Profile - Pay Types tab and **SAVE**.
> - Select your recognisable pay type from the dropdown timesheet list of a new timesheet row.
> - Enter the number of hours worked where applicable in the timesheet. 
>     - Leave the 'Exclude from annual leave calculations' tick box **blank** as you enter the hours.
> - The timesheet summary displays all taxable allowances together with the standard pay as one combined Gross figure.

| ![Info - Blue Block (1)](https://help.thankyoupayroll.co.nz/hs-fs/hubfs/KnowledgeBase/CalloutIcons/Info%20-%20Blue%20Block%20(1).png?width=52&height=52&name=Info%20-%20Blue%20Block%20(1).png) | Where you do not need to track hours, you may choose to put the amount in the timesheet and set the allowance to pay at 1 per unit. See [Higher Duties Allowance](https://help.thankyoupayroll.co.nz/en/custom-pay-type-t-higher-duties-allowance?hsLang=en) as an example setup. |
| --- | --- |

<iframe width="256" height="192" src="https://www.youtube.com/embed/E2HXN2HoYYg?feature=oembed" frameborder="0" allow="accelerometer; autoplay; clipboard-write; encrypted-media; gyroscope; picture-in-picture; web-share" referrerpolicy="strict-origin-when-cross-origin" allowfullscreen title="Creating a Custom Pay Type To Pay At A Different Rate" style="position: absolute; top: 0px; left: 0px; width: 100%; height: 100%; border: none;"></iframe>

---

### Further Resources

- [Information on employee hours of work - Employment New Zealand's website](https://www.employment.govt.nz/pay-and-hours/hours-and-breaks/hours-of-work#scroll-to-1).
- Need more information on [creating custom allowance pay types? Follow this link to our dedicated article.](https://help.thankyoupayroll.co.nz/en/custom-allowance-pay-types?hsLang=en)

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