If you're just taking care of the taxes outside of Sage, the easiest thing to do would be to set up a labor item with the cost of her hourly rate, and set her up as a vendor. On the appointed days of the month, do a payment to her as the vendor, put the number of hours in the Qty slot, choose the labor inventory item.

Well, we are still using SAGE to calculate the taxes and print the quarterly returns.  So this doesn't work, setting her up as a vendor.  I don't know why SAGE doesn't allow for part time or hourly non-billable employees, that's crazy.

I'm confused--you say you are using Sage to calculate the taxes and print the quarterly returns, yet you mentioned in your initial question, "I don't need the payroll module, we only have one employee." Are you already using the payroll module or not?

I probably should have said we are not using SAGE's payroll service.  I'm using SAGE to calculate taxes and run reports and it does not allow me to enter hours for a part time employee.  It only allows for a set number of hours in a given pay period.

Ah, gotcha. We just had a misunderstanding in terminology is all.  You do have to choose a default set of hours, but you can always override those hours on the payroll entry screen.

When you set the pay frequency on an employee the Hours Per Pay Period field is filled in automatically but you can change that. Since this employee's hours vary, set her Hours Per Pay Period to zero so you don't accidentally pay her for the wrong number of hours. Then just enter her actual hours during Payroll Entry.