Pay codes are the "categories" that wages, reimbursements, and deductions are placed into. Pay codes are referenced in these APIs (the Payables API, for instance) using their apiKey value, which is an alphanumeric string that LOOKS_LIKE_THIS.

We strongly encourage readability in identifiers whenever possible. Some legacy payroll systems create pay codes in ambiguous lists, like every code from BONUS1 to BONUS10. We encourage you to specify pay codes' names and keys clearly and unambiguously.

For wages

Pay codes for wages (or contractor pay) are specified using a payCodeType of TAXABLE_PAY. This type indicates that pay amounts should be treated as a wage (or contractor pay) and subject to tax withholding rules, as applicable.

While this type includes the word TAXABLE, pay amounts using these pay codes are subject to withholding based on the tax rules of the worker being paid. For an employee, the amount would typically be subject to income tax withholding, FICA, and so on, and is included in Box 1 of Form W-2. For a contractor, the amount would generally not have any tax withholding applied.

For reimbursements

Pay codes for reimbursements and other non-wage items are specified using a payCodeType of NON_TAXABLE_PAY. Pay amounts using these pay codes are explicitly treated as non-wage amounts, and are never subject to tax withholding. These amounts are not included in Box 1 of Form W-2 for employees.

For one-time deductions

Pay codes for one-time deductions are specified using a payCodeType of DEDUCTION. Amounts using these pay codes are treated as post-tax deductions in payroll calculation, so they are deducted from pay remaining after pre-tax deductions, tax withholding, and retirement contributions are removed.

Creating a pay code for one-time deductions, and submitting amounts under these pay codes, does not create any recurring rules for deductions. They're for one-time deductions amounts only. To create rules for recurring deductions—for instance, benefit plan costs like medical or vision, retirement contributions, or wage garnishment—you need to use the Everee admin portal. That's not currently supported in the API.

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