How Do I Pay My Employees Commission Only?

Background

You may have employees that are paid on commission.  Commission is commonly paid to salespeople, and can be based on a percentage of sales, or another incentive method, such as a flat dollar per unit.  For more information, see our blog article What Is Commission?

1. Set up employee with $0 hourly or salary rate. You won’t actually be using this to pay them, but this will ensure that only commissions will be paid.
2. Set up Commission money type and mark the hour type as “frequency used” if you do not already have this set up in the software. Read our help article, ” How to Set Up Money Types, ” for more information.
3. On Step One of payroll, enter the dollar amount in the “Commission” money type box.
   • You can indicate this commission payment should be taxed at the supplemental rate if needed by checking the Supplemental Rate box.
4. Proceed with payroll as usual. You can pay other employees on this payroll, if you want, or just pay this employee.

For more details on how to run a payroll, see Payroll Process Step 1 – Payroll Entry.

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