Pay a Team Member Multiple Rates
Square Payroll allows you to pay an employee or contractor different rates for different jobs they perform.
Add an Additional Pay Rate
- Log in to the Payroll section of your online Square Dashboard > Payroll Team.
- Click on the team member you’d like to add additional jobs for.
- In the Compensation section, Add Job.
- Enter or select a Job Title. Note: You can create up to 12 jobs for each team member.
- Enter their pay rate.
Running Payroll with Multiple Pay Rates
- If you use Square Timecards, click Import Timecards.
- For team members that worked multiple rates during the pay period, hours will be imported for each job and rate they worked.
- If any team members worked multiple rates and accrued overtime or double time, these rates will be calculated as one-and-a-half times and two times the weighted average of rates worked, respectively. If a team member worked overtime or double time in multiple workweeks in the pay period, Square Payroll will calculate overtime and double time pay per workweek to calculate the weighted average overtime or double time rate of the pay period. If hours are edited after importing timecards, overtime and double time pay will not be calculated per workweek and will be calculated over the pay period. Note: Paystubs will show the weighted average overtime and double time rate for the pay period, not for each workweek. You may override the overtime or double time rates for a team member individually by clicking Edit under the Rate column for that team member.
- If you need to enter PTO, click Edit under the Rate column and enter any applicable PTO hours and the associated hourly rate.
- If you’re not using Square Timecards, click Edit under the Rate column to enter hours for team members who have multiple jobs.
- Enter the total hours the team member worked per job. Total hours includes regular, overtime, and doubletime hours.
- Enter any overtime and doubletime hours worked. The overtime rate is calculated as one-and-a-half times the is the weighted average of rates worked. Double time rate is calculated as two times the weighted average of rates worked.
- Enter any applicable PTO hours and the associated hourly rate.
- Click Save.
- Repeat for each team member who has multiple jobs.
- Click Continue to finish running payroll as usual.
Weighted Average of Rates Worked
Overtime and double time rates are calculated based on the weighted average of rates worked. The weighted average of rates worked is calculated by adding up the earnings from all pay rates and dividing by the total number of hours worked.
For example, if an employee worked 20 hours at $10/hr and 30 hours at $20 hr, the average rate is calculated as follows:
- Total earnings: ( 20 hours x $10/hr ) + ( 30 hours x $20/hr ) = $800
- Total hours worked: 50
- Weighted average of rates worked: $800 / 50 hours = $16/hr