Payroll Help

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Employee Pay Types

When adding an employee, you will need to select the employee’s Pay Type.  Here’s an explanation of the three Pay Types in Patriot Software:

1) Hourly: This employee is paid by the hour, and is eligible for overtime pay according to the Fair Labor Standards Act (FLSA) overtime rules.  Hourly employees must be paid 1 ½ times their regular hourly rate for all hours worked over 40 hours in one workweek. Hourly employees are considered “non-exempt,” since they are not excused from these overtime rules. You can set up more than one role for employees with multiple job roles and pay rates in the software.

2) Salary: This employee receives a set amount of pay each pay period, regardless of the number of hours worked.  Salaried employees who meet certain requirements are considered “exempt” from FLSA overtime rules and therefore do not earn overtime pay if they work over 40 hours in a workweek.  Some conditions must be met for an employee to be paid salary and exempt from overtime rules.  See more information about FLSA exemptions on the Department of Labor Website.

3) Salary Non-Exempt: This Pay Type is not as commonly used as Hourly or Salary.  This employee receives a set amount of pay each pay period, but they are eligible for overtime pay because they do not meet the requirements to be exempt under the FLSA.   Normally, a salary non-exempt employee will be paid the same flat rate even if they worked less than 40 hours in a workweek.  However, if they work over 40 hours, they will receive overtime pay of 1 ½ times their regular hourly rate.

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