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.

Creating separate pay types for different roles will help keep track of budgets and expenditures.

Tracking and Job Codes can be tailored to match your reporting needs. Each unique pay type can be reported on by running a Pay Type Summary Report.

This allowance is:

❌	A regular payment I can use system pre-loaded pay types 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:

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.

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 as an example setup.

Further Resources

Information on employee hours of work - Employment New Zealand's website.
Need more information on creating custom allowance pay types? Follow this link to our dedicated article.