Pay Rate is in use elsewhere. It can’t be set to inactive.

The Pay Rate you are attempting to mark as inactive is assigned to an Employee, regardless of the Employee status (eg. Archived in a previous financial year).
The Pay Rate needs to be unassigned first before it can be made inactive.

1. Take note of the Pay Rate DBID (Database ID) for the Pay Rate you are attempting to de-activate.
2. Preview the Employee Masterfile Report and view the Pay Rates within the Report to locate who the Pay Rate is assigned to.
3. Once you have determined which Employee the Pay Rate is assigned to, edit the Employee.