Your payroll categories are the building blocks of your payroll. Everything that affects your employees' pay, taxes, and others (even if it doesn't appear on their paystub) should be created as a payroll category.
Table of Contents:
Classifications
There are several classifications of payroll categories in Harmony.
| Payroll Category Class | Definition | Examples |
|---|---|---|
| Permanent Earning | Your earnings are things that add to the employee's gross pay. Its 'permanent' type means that it will typically be included in every pay period. | Overtime, commissions, vacation paid |
| Permanent Deduction | Your deductions are things that subtract from the employee's gross or net pay. Its 'permanent' type means that it will typically be included in every pay period. | Garnishments, employee-paid RRSPs/benefits |
| Basic Salary | Your basic salary payroll categories act like permanent earnings and there are two kinds of basic salary. These two categories are in Harmony by default and you cannot create any additional ones. This is the base pay for your employees. | Salary, hourly wages |
| Permanent Benefit | Your benefits are things that do not affect your employees' gross pay, but may affect net pay, as your benefits may be taxable. Its 'permanent' type means that it will typically be included in every pay period. | Employer-paid RRSPs/benefits |
| Accrual | Your accruals are things that do not affect your employees' gross nor net pay, but will be accrued or earned every pay period (or all at once). You must select an earnings or benefits payroll category as the accrual's payout. Paying it out means that it will decrease the balance in the accrual. | Vacation, PTO, sick |
| Tax | Your taxes can be employee-paid or employer-paid. Employee-paid taxes are things that subtract from the employee's gross pay. Employer-paid taxes are things that do not affect your employees' gross nor net pay, but can be used for tracking purposes or to generate certain reports. | Employee-paid: Income tax Employer-paid: Workers' Compensation, Employer Health Tax |
| Temporary Earning | Your earnings are things that add to the employee's gross pay. Its 'temporary' or 'variable' type means that it is taxed as a bonus and may not affect every pay period. You can assign this temporary earning to a particular pay period or a set of consecutive pay periods. | Bonus |
| Temporary Deduction | Your deductions are things that subtract from the employee's gross or net pay. Its 'temporary' or 'variable' type means that it may not affect every pay period. You can assign this temporary deduction to a particular pay period or a set of consecutive pay periods. | |
| Temporary Benefit | Your benefits are things that do not affect your employees' gross pay, but may affect net pay, as your benefits may be taxable. Its 'temporary' or 'variable' type means that it may not affect every pay period. You can assign this temporary benefit to a particular pay period or a set of consecutive pay periods. | COVID benefits |
| Scheduled Deduction | Your deductions are things that subtract from the employee's gross or net pay. Its 'scheduled' type means that it may not affect every pay period but can occur once a month. | Union dues |
| Statutory Holiday Pay | Note that this payroll category is for Canada only. Your statutory holiday pay payroll categories act like permanent earnings, and will reference the holidays in your holiday calendar in order to pay out the statutory holiday pay for your employees. Read our article on Statutory Holiday Pay for more information. | Statutory Holiday Pay |
Creating a Payroll Category
- Navigate to Payroll > Payroll Setup > Payroll Categories.
- Click the "+ New" button to create a new payroll category.
- Enter all required fields. Depending on the class of the payroll category, you may have additional fields to enter.
- Click the save button to save your changes.
- You will be prompted to assign this new payroll category to all active employees. Click "OK" to assign your new payroll category to all active employees (where payroll status is active) or "Cancel" to manually assign this new payroll category to your employees later.
Assigning Your Payroll Categories to Your Employees
In order for a payroll category to apply to an employee during a pay run, you must have assigned it to their master paycard. You can either assign it on a per-employee basis, or on a payroll-group basis.
Mass-Updating Your Employees' Master Paycards
- Navigate to Payroll > Payroll Setup > Assign Payroll Categories.
- In the first dropdown field, select your payroll category that you want to assign to employees.
- If you'd like to select individual employees to assign, use the second dropdown field and select an employee. If you'd like to assign the payroll category to entire payroll groups, skip to the next step (#4).
- (optional) Enter rates/units or amounts into the applicable boxes to apply to your selected employee or payroll groups. If these values differ per employee, leave them as zero.
- To assign the payroll category to the selected employee, click "+ Add". To assign the payroll category to particular payroll groups, click "Add to Payroll Group". Select the payroll group(s) and click "Save".
- (optional) You can now see the assigned employees in the list at the bottom of the screen. You can click the edit button to edit the values for each employee, if the values should differ per employee.
Updating Employee Master Paycards
- Navigate to Payroll > Payroll Employees > Assign Payroll Category.
- Select an employee in the dropdown field in the middle of the page.
- All assigned payroll categories will be automatically populated.
- Click "+ Add" to assign a new payroll category.
- Select the payroll category that you want to assign.
- Enter the corresponding rate/units or amount for the payroll category for this employee.
- Click "Save" to save your changes.
- Repeat steps 2 through 7 for each applicable employee.