1. (a) The percentage of the taxpayer's payroll allocated to New York State is determined by dividing the wages, salaries and other personal service compensation of the taxpayer's employees, except general executive officers, within New York State during the period covered by the report, by the total amount of compensation of all the taxpayer' s employees, except general executive officers, during the period covered by the report.
2. (b) Wages, salaries and other compensation include all amounts paid for services to the taxpayer, but do not include amounts paid by the taxpayer which do not have the element of compensation for personal services actually rendered or to be rendered.
3. (c) Wages, salaries and other compensation are computed on the cash or accrual basis, in accordance with the method of accounting used in computing the entire net income of the taxpayer.

4. (d) Employees within New York State include all employees regularly connected with or working out of an office or place of business of the taxpayer within New York State, irrespective of where the services of such employees were performed. However, if the taxpayer establishes to the satisfaction of the Tax Commission that (1) a substantial part of its payroll was paid to employees attached to an office in New York State who performed a substantial part of their services outside New York State and (2) establishes that the computation of the payroll factor according to the general rule stated above would not properly reflect the amount of the taxpayer's business done within New York State by its employees, then the Tax Commission may permit the payroll factor to be computed on the basis of the amount of compensation paid for services performed within New York State. Services performed within New York State will be deemed to be:

   1. (1) in the case of an employee whose compensation depended directly on the volume of business secured by him, such as a salesman on a commission basis, the amount received by him for the business attributable to his efforts within New York State;
   2. (2) in the case of an employee whose compensation depended on other results achieved, the proportion of the total compensation which the value of his services within New York State bears to the value of all his services; and
   3. (3) in the case of an employee compensated on a time basis, the proportion of the total amount received by him which the working time within New York State bears to the total working time.

Tax Law, § 210(3)(a)(3)