(3) Tax Withholdings - Identify the federal and state withholding requirements for the employee. (4) Payment method - Select if using a paper check or direct deposit. (5) Pay Types (a) Select if hourly or salary and rate as well overtime rules (b) Time off Policies (i) What is it? Paid time off is time the employee is away from work but would still get paid for things like vacation and sick time. (ii) Accruing Vacation / Sick Leave - you must determine the __________ (when it is earned) and amount per year