Pay Rate Table Example

If you are new to Payroll, you may find it helpful to review a pay rate table example.

Richard Brady's company is located in Massachusetts and he performs most of his work in Massachusetts. Some projects, however, are located out of state, and Richard gets paid a higher hourly rate for these projects. To set up multiple pay rates for Richard and determine which rate to use based on where he performs work, you use pay rate tables.

The following steps explain how to establish an employee's default, in-state rate, and an override out-of-state rate. The example then shows how to associate the override rate with a project, and explains what happens when an employee charges time to a project that uses the default rate, and a project that uses the override rate. Finally, the example shows what the employee is paid when payroll is processed based on these rates.

Prerequisites: To complete these steps, you must belong to a security role with the appropriate rights. You must also set the Enable Pay Rate Tables option to Yes in Settings > Accounting > Labor Options.

  1. Set the default pay rate.

    You set Richard's default pay rate to $45.00 in the Pay Rate field on the Payroll tab of the Employees hub. Set his pay Type to Hourly.

  2. Establish the override rate in the OutofState labor pay rate table.

    You create an OutofState Labor Rate table on the Pay Labor Rate Tables form and add one entry for Richard Brady, with an Effective Date of 7/1/21 and a Rate of $55.

  3. Associate the default rate with the in-state project.

    Open project 2000004.01 from the Projects hub and set the Pay Rate Method field on the Time & Expense tab to From Employee Pay Rate. This means that the project is configured to use the default pay rate established for Richard Brady in the Pay Rate field on the Employees hub's Payroll tab.

    You can also associate a pay rate table directly with an employee, rather than with a project, from the Time & Expense tab of the Employees hub. If an employee has a valid pay rate table and rate established at both the project and employee level, Vantagepoint uses the table and rate specified at the project level.

  4. Associate the override table with the out-of-state project.

    Open project 2000003.01 and set the Pay Rate Method field on the Time & Expense tab of the Projects hub to From Labor Rate Table. Select OutofState as the Rate Table.

  5. Post Richard Brady's timesheet.

    Assume Richard Brady charges 88 hours to two projects in a two week pay period ending July 15, 2021.

    All of the work on Project 2000004.01 was performed in Massachusetts. Work on Project 2000003.01 was performed in New Hampshire.

  6. Process payroll.

    Process payroll for the period ending July 15.

    The results are as follows:

    • For the first 40 hours charged to project 2000004.01, Vantagepoint looks to the Projects hub to determine that, for this project, Vantagepoint should use the employee's default rate to determine pay. Vantagepoint multiplies the default pay rate of $45 by the hours worked on project 2000004.01 (40) for a total of $1800.00.
    • For the next 48 hours charged to project 2000003.01, Vantagepoint looks to the Projects hub to determine that, for this project, it should use the OutofState rate table to retrieve the pay rate. Vantagepoint compares the effective date in the table with the transaction dates on Richard Brady's timesheet and multiplies these 48 hours by the override rate of $55 for a total of $2640.00.
    • Richard's gross pay for this period (prior to deducting withholdings) is $4,440.00.