Compensation
Compensation is everything you pay an employee. In Bokapsys it comes from two places:
- How much each person is paid (their salary or hourly rate, and their pay schedule) is on their own record. See Employees.
- What is calculated on every payslip (salary, overtime, each tax, and any allowance or deduction of your own) comes from your pay items. They live under Payroll → Compensation.
This page is about the pay items.
Before you start
Section titled “Before you start”- Your role can view pay items. To add, edit or turn off pay items you need permission to manage pay components (by default Super admin, Admin and CFO).
The Pay Components list
Section titled “The Pay Components list”Open Payroll → Compensation. The list of pay items opens. It shows:
| Column | What it means |
|---|---|
| Name | The name printed on the payslip. Standard items are marked Standard. |
| Type | What kind of item it is (see below). |
| Amount or rate | The fixed amount, the percentage, the formula, or a short note for the standard items, such as how a tax is worked out. |
| Lowers tax on | For your own deductions: which taxes the deduction reduces. |
| Applies to | Who gets the item. Standard items read Applied automatically; your own items name the employees you ticked them on. |
| Status | Active, Starts a future date, Ends a date, or Turned off. |
Use the type list above the table to show only one type, for example Employer taxes.
Types of pay item
Section titled “Types of pay item”| Type | What it means | Example |
|---|---|---|
| Earning | Money the employee earns. Adds to gross pay. | Salary, Overtime, a car allowance |
| Employee tax | Tax taken from the employee’s pay. | Federal Withholding, Medicare |
| Employer tax | Tax you pay on top of wages. Not taken from the employee. | FUTA |
| Deduction | Other money taken from pay. | Union dues, a loan repayment |
| Employer contribution | Money you pay on the employee’s behalf, on top of wages. | A wellness stipend paid to a provider |
| Reimbursement | Paying back an expense the employee covered. Not taxed. | Mileage |
Add the standard US pay items
Section titled “Add the standard US pay items”You don’t need to build the standard pay items yourself. One button adds the standard US set.
- Open Payroll → Compensation.
- Click Set up US payroll (top right, or in the middle of the page when the list is empty).
- You see US payroll set up, with a line such as “14 standard pay items added”. The list fills with the standard items.
| Item | Type | What it calculates | On the payslip? |
|---|---|---|---|
| Salary | Earning | Annual salary ÷ pay periods a year. Salaried employees only. | Yes |
| Regular Pay | Earning | Regular hours × hourly rate. Hourly employees only. | Yes |
| Overtime | Earning | Overtime hours × hourly rate × 1.5. | Yes |
| Double Time | Earning | Double-time hours × hourly rate × 2. | Yes |
| Paid Time Off | Earning | Vacation, sick, holiday and other paid time-off hours × hourly rate. | Yes |
| Federal Withholding | Employee tax | Federal income tax from the employee’s W-4, using the IRS percentage method. | Yes |
| Social Security | Employee tax | 6.2% of wages, up to $184,500 of wages per employee in the calendar year (2026 figures). | Yes |
| Medicare | Employee tax | 1.45% of all wages, plus 0.9% Additional Medicare Tax on wages above $200,000 in the year (2026 figures). | Yes |
| State Withholding | Employee tax | State income tax for the employee’s state. See Withholding. | Yes |
| Local Withholding | Employee tax | City, county or school-district tax you entered for the employee. | Yes |
| Social Security (Employer) | Employer tax | Your matching 6.2%, on the same wages. | No |
| Medicare (Employer) | Employer tax | Your matching 1.45%. There is no employer share of the Additional Medicare Tax. | No |
| FUTA | Employer tax | Federal unemployment tax: 0.6% of the first $7,000 of each employee’s wages in the year (2026 figures). | No |
| State Unemployment (Employer) | Employer tax | Your state unemployment rate × wages, up to the state’s wage base, from your state registration. | No |
A wage base (or wage limit) is the most wages a tax applies to in a calendar year. Once an employee has earned more than that in the year, the tax stops for them until 1 January. Bokapsys tracks each employee’s year-to-date wages to apply these limits, and also caps the Social Security tax itself at the year’s maximum.
The standard items start on 1 January of the current year, so earlier pay periods of the year can be calculated too. Pressing Set up US payroll again is safe: it only adds what is missing, brings the standard items up to date and never duplicates an item.
Standard items are kept up to date by Bokapsys, so their edit button is greyed out and they can’t be turned off.
How to check it worked: the list shows the standard items, and on the Payroll Dashboard, Set up pay items is ticked.
Worked example
Section titled “Worked example”Maria is paid $2,000.00 gross on a bi-weekly run in 2026, with no pre-tax deductions and well under every wage limit.
| Line | Calculation | Amount |
|---|---|---|
| Regular Pay | $2,000.00 | |
| Social Security | $2,000.00 × 6.2% | $124.00 |
| Medicare | $2,000.00 × 1.45% | $29.00 |
| Federal Withholding | From her W-4 and the IRS tables | (depends on her W-4) |
| State Withholding | From her state’s tables | (depends on her state) |
| Social Security (Employer) | $2,000.00 × 6.2% | $124.00 |
| Medicare (Employer) | $2,000.00 × 1.45% | $29.00 |
| FUTA | $2,000.00 × 0.6% (until she reaches $7,000 for the year) | $12.00 |
| State Unemployment (Employer) | $2,000.00 × your state rate (for example 2.7%) | $54.00 |
Her net pay is $2,000.00 minus her own taxes. The employer lines are costs to you on top of her gross pay, and do not appear as deductions on her payslip.
Add your own pay item
Section titled “Add your own pay item”Use your own pay items for things the standard set doesn’t cover, such as a car allowance, union dues or a loan repayment.
- Click New pay item. The New pay item window opens.
- Fill in the fields below.
- Click Save pay item. You see Pay item added.
- Open each employee it applies to and tick it under Compensation → Pay items, then save the employee. See Employees.
| Field | Required | What it means | Example |
|---|---|---|---|
| Name | Yes | The name on the payslip. | Car allowance |
| Type | Yes | Earning, Deduction, Reimbursement or Employer contribution. Can’t be changed later. | Earning |
| How it is worked out | Yes | Fixed amount each pay period, Percentage of gross pay (not for earnings) or Formula. | Fixed amount each pay period |
| Amount (USD) | For a fixed amount | The amount each pay period, in dollars. | 150.00 |
| Percentage of gross pay | For a percentage | The percentage. | 3 |
| Short name | For a formula | The name other formulas use to refer to this item. Filled in from the name, and fixed once the item is created. | car_allowance |
| Formula | For a formula | A calculation. The hint under the box lists what you can use: hours_regular, hours_overtime, rate_regular, period_salary and gross, the functions round, min, max, if and sum, and the short names of your other pay items. | round(gross * 0.02, 2) |
| Taxes it lowers | For a deduction | After tax (taken after every tax is worked out, such as union dues), Retirement deferral - lowers income tax only (a traditional 401(k), 403(b) or 457(b); Social Security, Medicare and FUTA are still due) or Section 125 - lowers income tax, Social Security, Medicare and FUTA (a cafeteria plan premium, health FSA or HSA through payroll). | After tax |
| Account | No | The account in your chart of accounts the item is charged to (an expense account for earnings, reimbursements and contributions; a liability account for deductions, where the amount is held until you pay it on). Leave it on Default payroll account to use the standard payroll account. | 6040 Other Personnel Related |
| Show on the payslip | Ticked by default | Untick for items the employee should not see. | Ticked |
A retirement deferral you set up this way also stops at the yearly IRS limit for that kind of plan.
Change or turn off a pay item
Section titled “Change or turn off a pay item”- To change one of your items, click its edit icon, change it and click Save pay item. Its type and short name can’t be changed.
- To stop using an item, click the turn-off icon and confirm Turn off. It is left out of every pay run paid from today on. Payslips that already include it are not changed, and you can turn it back on later with the turn-on icon.
If someone else changed the item while you had it open, you see Someone else changed this pay item. The list reloads; make your change again.
Benefits, retirement and garnishments
Section titled “Benefits, retirement and garnishments”Deductions for benefit plans, retirement accounts, HSA and FSA accounts, and court-ordered garnishments are set up per employee in their own areas, not as pay items here. See Benefits and Paying employees.
Changing someone’s pay
Section titled “Changing someone’s pay”Salaries and hourly rates are on the employee’s record, and every change is dated. See Change someone’s pay.
Common problems
Section titled “Common problems”| Symptom | What it means and how to fix it |
|---|---|
| “Payroll cannot be calculated without the standard pay items.” on the dashboard | Click Set up US payroll. |
| The Set up US payroll and New pay item buttons are missing | Your role cannot manage pay components. |
| A pay item of your own is not on anyone’s pay run | Tick it on each employee’s record under Compensation → Pay items. The Applies to column reads “No one yet” until you do. |
| Account is refused | The account must be the right kind for the item (an expense account for an earning, a liability account for a deduction), and can’t be a cash account. |
| State Unemployment shows $0.00 | Your state registration has no rate or wage base. See Set up payroll. |
| Social Security stops part-way through the year | The employee has reached the year’s Social Security wage limit. This is correct. |