TABLE OF CONTENTS

• Who have access to the reference
• How to create a Payroll Item
• Payroll Item Configuration
• How Hours from Time Cards Match to Payroll Items
  • Where to See Time Card Hours Grouped by Payroll Item
• Addition types of Payroll Items
  • N/A
  • Ignore
  • Proportional – Company Contribution
  • Fixed Each Payroll Period
  • AdHoc – Overhead
  • AdHoc – BP

We use the Payroll Items reference to set up the earnings, deductions, and contributions that are used in your company.

Who have access to the reference

The Payroll Items reference is a system reference like the Cost Types. A regular user cannot create a new record, but can select items from the list in the Labor Cost Rates library to match with the required wage type and rate.

The reference is accessible to the “Administrators”user group.

Generally, the payroll items are configured by FCX according to your company's needs.

How to create a Payroll Item

Payroll Items should be synced from a payroll system. It is a key element to match payroll data correctly between FCX and payroll system. 

Payroll Item Configuration

1. “Wage” checkbox is mainly configured by FCX.

It must be checked for any Payroll Item with Hours to calculate a Labor Rate Burden.

An unchecked “Wage” box indicates a non-wage payroll item. These payroll items are excluded from the Daily and Weekly Cost Rate calculations.

• Note that “Unit” QTYs are for Non-Wage Items are not treated as hours here.

2. Vacation and Sick — filled in when synced from a payroll system. The checkboxes designate a payroll item as a vacation or sick item for further correct matching to a required cost type.

3. Addition Type impacts on cost rate calculation. Read more below.

4. Financial Account is used to record labor costs to the selected account for all Time Card hours assigned to the appropriate Payroll Item.

The FA in the payroll item predominates the FAs specified in a Cost Type, a WO Type and so on. Read more about how we calculate an FA in the Financial Distribution here.

5. Apply Job Costs to is used to map payroll items for job costing. For example, in FCX, you track all PW hours (regular, overtime, double time) on the “PW” payroll item. However, in your payroll system, these PW hours may be allocated to multiple payroll items on a check: PW Regular, PW OT.

To map payroll items, open the required items in FCX and specify the item that will accumulate all PW cost rates.

6. FQ Payroll Item (Federal Qualified Payroll Item) on the payroll item card lets you designate a specific payroll item for tracking hours exceeding the standard 40-hour workweek, per U.S. federal Fair Labor Standards Act (FLSA) rules. 

• State-specific overtime rules (e.g., daily thresholds) may still apply separately, but the FQ item focuses on federal aggregation across the full week.
  

For example, in California:

• Daily limits: Overtime after 8 hours; double-time after 12 hours.
• Weekly OT limit: 40 hours.

Payroll items configuration:

• Overtime Rate: Payroll item for standart overtime hours. It matches to the FQ Overtime Rate payroll item.
• Double-Time Rate: Payroll item for double-time hours.

Example Calculation (CA employee):

• Mon–Thu: 10 hrs/day = 32 hrs regular + 8 hrs Overtime Rate.
• Fri: 12 hrs = 8 hrs regular + 4 hrs Federal Qualified Overtime Rate.

Total week: 52 hrs

• Regular: 40 hrs
• Standard Overtime: 8 hrs
• Federal Qualified Overtime: 4 hrs

7. Allow Requests — to create a Miscellaneous request in the FCX Mobile App.

8. One Request per Day — specifies that an employee can only create one miscellaneous request for the current payroll item per day.

9. Use Non-Work WO for Requests — to use a Non-Work Work Order for a Misc request of the current payroll item.

The Non Work WO is calculated from the Employee's TK Configuration, otherwise it is set by the static value from the system constant.

10. Order — optional field. It is used to arrange the columns of the Payroll Items in the specified order on the Summary tab of the Payroll Periods dashboard.

How Hours from Time Cards Match to Payroll Items

A payroll item is calculated using the Cost Types table, where each required combination of parameters (wage type, PW, state, employee classifier, activity, tax code, shift type) is linked to a specific payroll item.

Hours on Time Cards are allocated to a cost type, wage type, state, and PW status, and can optionally be allocated to a shift type or activity. When the system calculates payroll, it looks up the Cost Types table and finds the payroll item that matches the combination of wage type, employee classifier, PW, state, activity, tax code, and shift type.

Example: On Site cost type

• Row 1: Regular hours that are not PW are matched to Item 1.
• Row 2: Regular hours that are PW are matched to PW Item.
• Row 3: Regular, non‑PW hours worked in NY by Hourly employees are matched to NY Hourly.
• Row 4: Regular, non‑PW hours worked by employees in Classifier2 on the HVAC activity are matched to Item 2.
• Row 5: Regular, non‑PW hours worked by employees in Classifier3 with the Alabama Overhead 120 tax code are matched to AL OH Item.
• Row 6: Regular PW hours worked by employees in Classifier4 on the Evening shift are matched to Evening Item.

Where to See Time Card Hours Grouped by Payroll Item

Access the Payroll Periods dashboard, select a payroll period, and go to the Summary tab.

This tab provides a clear overview of Time Card hours broken down by payroll item. The default view is a pivot table that groups hours by employee, with columns showing hours for each applicable payroll item (e.g., Regular Pay, Overtime Rate). You can easily see total hours per employee and per payroll item at a glance.

Addition types of Payroll Items

Select an Addition Type for the Payroll Item which you want to include in Cost Rates calculation.

N/A

N/A describes hourly wage payroll item. It means no addition type for the payroll item. You must specify N/A for all payroll items that record Employees hours worked: regular pay, overtime rate, etc. It is a must to correctly calculate adjusted rates.

Ignore

“Ignore” addition clearly indicates that this payroll item is not used in Adjusted Cost Rates calculation. 

For instance, “Medicare Employee” Payroll Item includes a specified wage deduction. Inside FCX, we determine this Item with “Ignore” addition type. When we sync Cost Rates of paid payroll period from QB/Paylocity, the deduction amount isn't included into Adjusted Cost Rates calculation, nor it isn't written off to the financial distribution.

Proportional – Company Contribution

A Proportional Payroll Item is used to calculate an increase in the Employee Cost Rate that is allocated proportionally according to each rate of pay. The proportional increase is calculated by the ratio of the total of the proportional payroll items to the total of gross wages paid.

Example 

Fixed Each Payroll Period

Fixed Payroll Item is used to calculate an increase for a regularly applied (each payroll period) fixed allowance that is to be added to the Employee Cost Rate. The increase is allocated equally across each hour of labor.

Example 

Both proportional and fixed Payroll Items stipulate which are additions come with Employee Cost Rate. They can be used simultaneously. In such a case, we calculate each type of increase (proportional, fixed), then we sum the increases to the basic rate. 

AdHoc – Overhead

Overhead Type isn't included in Cost Rates calculation. We take payroll data for Adhoc - Overhead Payroll Items from a payroll system and write-off as a separate source type in Financial Distribution: Employee Payroll Period Overhead. It includes all payroll overhead expenses, and it's factored into the Corporate Overhead Build Plan.

The Financial Account for payroll overhead expenses and a Corporate Build Plan are defined in the Constants/Settings.

AdHoc – BP

We use 'AdHoc BP' payroll item when we can specify the Direct Cost Build Plan by contrast with AdHoc Overhead type of payroll item. 

AdHoc – BP payroll items are for the group of other payroll items in payroll system, for example, expense reimbursements, travel advances, and other additions to gross or net pay.    

This addition type of payroll item is used to calculate a non-wage item.

We sync the payroll item amount from a payroll system and divide it to the non-wage payroll item QTY  from the Time Card non-wage table.

During financial distribution calculation, the system multiples the rate to the QTY from Time Card and writes it off to the allocated Build Plan and a specific financial account. 

The financial account specified in a payroll item prevails over financial accounts from Work Order Type, Employee, and so on.