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Standard Earnings & Deductions

This article will guide you through the standard earnings and deductions available in GoCo when your account is provisioned with embedded payroll, limitations of these defaults, and how these items appear on employee paystubs.

Standard Earnings in GoCo

When your GoCo account is provisioned with embedded payroll, a comprehensive set of standard earnings and deduction types are automatically available for immediate use. These are integrated natively, meaning they carry the correct pre-configured tax treatments right out of the box.

This guide outlines our standard defaults, the structural limitations you should keep in mind, and how these items display cleanly on employee paystubs.

Screenshot 2024-11-06 at 1.00.55 PM
  • Regular Salary Earnings – For salaried employees’ regular pay.
  • Regular Hourly Earnings – For hourly employees’ regular pay.
  • Contractor Pay (1099) (Non-Taxable) – For contractor payments.
  • Bonus – For discretionary payments beyond regular wages.
  • Cash Tips – For reported cash tips earned by employees.
  • Commission – For payments based on sales or performance.
  • Correction Payment – For adjustments to previously paid wages.
  • Paycheck Tips – Tips received through payroll.
  • Severance – For termination pay.
  • Reimbursement (Non-Taxable) – For non-taxable expense reimbursements.
  • Holiday Time Off – For holiday hours.
  • Time Off Buckets – Includes both standalone time-off (e.g., Vacation Time Off) and payout options (e.g., Vacation Payout).

🌟These earnings types are integrated directly, so no extra configuration is needed. They’re automatically treated as taxable where applicable, making setup seamless for your payroll needs.

Standard Deductions in GoCo

GoCo offers a variety of pre-configured deductions, which are also managed through embedded payroll:Screenshot 2024-11-06 at 1.04.56 PM

  • Natively Hosted Benefit Deductions – Powered by GoCo’s Benefits Administration, covers benefits such as health and dental. 
  • Child Support – For court-ordered child support deductions.
  • Retirement Contributions – Available plans include:
    • 401(k) and Roth 401(k)
    • SIMPLE IRA
    • 403(b) and Roth 403(b)
    • SEP-IRA
  • Retirement Loan Repayments – Available for eligible plans including:
    • 401(k) Loan Repayment and Roth 401(k) Loan Repayment
    • 403(b) Loan Repayment and Roth 403(b) Loan Repayment
    • IRA Loan Repayment

These deductions allow for easy setup and compliance with various tax and benefit requirements.

Limitations of Standard Earnings & Deductions

While our standard catalog covers most daily operating needs, it is vital to account for these specific payroll and logic boundaries:

🛑 Critical Audit Alert: Low Gross Wages & Custom Deductions

Custom deductions in embedded payroll can be dropped automatically by the system without warning if an employee’s gross wages for that specific pay period are too low to clear the total balance.

Because the system does not actively generate a dashboard notification flag for this occurrence, admins must carefully review payroll pre-check registers prior to submission to catch dropped lines.

⚠️ Note for Non-Integrated Retirement Accounts: If your payroll account does not utilize our integrated Human Interest 401(k) sync, do not build tiered company match conditions. You must explicitly input the hardcoded matching percentage directly based on the expected tracking outcome when creating or altering the deduction fields.

  1. Custom Earnings – Any earning type not listed above must be created as a custom earning. Please note that all custom earnings are treated as taxable and will appear in payroll reports + paystubs as a flat amount only)
  2. Custom Deductions – Custom deductions can be configured as either pre-tax or post-tax. However, only retirement codes and spending account codes are capped at the federal maximum. In addition, we only support goal amounts for retirement loans and garnishments.
    • Contractors(1099) Constraints: 
      • No Deductions: The system will block you from assigning any type of standard or custom deduction line to a 1099 profile.
      • Earnings Restrictions: Contractor earnings schedules are strictly limited to Contractor Pay (Non-Taxable), Bonuses, and Expense Reimbursements.

    For help with creating custom earnings, reach out to us at support@goco.io.

    Paystub Appearance

    Standard earnings and deductions are clearly itemized on each employee's paystub:

    • Earnings Section – Lists all earned wages, bonuses, tips, and any other standard or custom earnings. 
    • Deductions Section – Displays both standard and custom deductions, including benefit deductions, retirement contributions, and loan repayments. 

    Example of a Paystub (W-2 Employee)

    Screenshot 2024-11-06 at 1.14.23 PM

    Example of a Paystub (Contractor)

    If you need further assistance setting up your payroll, our team at support@goco.io is here to help. 💚