4 Main Gross Payroll Inclusions for Workers' Compensation Insurance
Published December 26, 2022.
Gross payroll inclusions are wages that include employees' pay before taxes, discretionary deductions, and other mandatory withdrawals that have been removed. Most employees' gross earnings include their base employee compensation, from salary to hourly wages to tips. Of course, there are also supplemental wages, such as bonuses, commissions, prizes, awards, and other modes of income.
However, when it comes to workers' compensation insurance benefits that cover pay for workers who've sustained different injuries or have become disabled due to their work, there are four main payroll inclusions paid by employers.
» Want to effectively manage workers' compensation? See our workers' comp tracking tips
1. Commissions & Draws Against Commissions
Commissions are a method of payment (or top-up) for workers when they complete the task at hand. Businesses typically employ sales commissions to bolster worker productivity, something that's usually reserved for salespeople.
Commissions are a form of regular income paid to employees who either receive a full-time salary plus commission or strictly commission. This form of compensation is meant to encourage and incentivize more effort from staff to boost revenues or reach business goals.
Draws Against Commissions
Some might make the case that draws against commissions aren't salaries. This is true because they're regular payouts instead of periodic payments. This is considered an alternative to straight commission only, something that's challenging for workers nationwide.
» Do commissions play a role in payroll deduction? See the different payroll deduction types
Everyone expects a bonus, be it at the end of the year or upon completing a critical assignment. However, while this is a common form of compensation by employers and governments, it's not guaranteed. That said, bonuses reward high performers, pushing workers to go the extra mile to receive some extra cash.
3. Extra Pay for Overtime Work
Many employers, especially successful ones that need to fulfill client orders or keep up with demand, will decide to pay employees for working more hours than what their contracts state. Calculating overtime can be beneficial for workers since they can garner a higher pay rate for additional work and clocking in more than 40 hours each week.
4. Pay for Holidays, Vacations, or Sick Days
Be it start-ups or corporations, employers need to go above and beyond to attract and retain employees in today's labor market. As a result, a growing number of firms in the private sector will offer holidays off, extra pay for working on a holiday, and even extend paid time off when workers are feeling ill.
It should be noted that these types of payroll inclusions need to be determined based on the rules and regulations regarding the number of paid holidays in the jurisdiction employees are working in.
As a quick summary, here's what employers and employees can expect in different areas:
- US: No federal requirements are outlined for paid sick leave.
- UK: Employees are permitted to take holidays as sick leave if they're sick during this period. They must also provide proof of illness to employers.
- Europe: Workers will receive a pre-determined percentage of their pay during sick leave.
» Want to successfully manage absence & leave? See our tips for effective absence & leave management
Manage Gross Payroll Inclusions With Payroll Software
Let's be honest: trying to figure out and calculate payroll inclusions for workers' compensation insurance can be tricky. This is why it's imperative to opt for payroll software that can eliminate these types of challenges, erase common mistakes, and ensure your company is adhering to local labor laws.
» Need help managing gross payroll inclusions for workers' comp insurance? Read TBR's payroll software reviews and find a solution to help you along the way.