New payroll items are mapped to an expense account
in QuickBooks called Payroll Expenses, but you can edit your payroll
items so they post to any expense account you wish. However, each
payroll item can only be mapped to one expense account which causes
problems when you want to allocate field labor to cost of goods sold
and admin labor as a regular expense. You can get around this by
establishing two payroll items for each of your payroll expenses - one
mapped to a cost of goods sold account, another mapped to a payroll
expense account - with one important exception, payroll taxes. Because
QuickBooks requires that you use one payroll item for each federal and
state tax, you are forced to choose between mapping your payroll taxes
to an expense account and understate Cost of Goods Sold or a Cost of
Goods Sold Account and understate Payroll Expenses. Many QuickBooks
consultants recommend that you prepare a journal entry each month to
move your payroll taxes into the correct category. But there is a way
to automate this.
1. If you haven't already, create payroll tax accounts under cost of
goods sold and expenses. Go to Lists > Chart of
Accounts, click on the Accounts button, and select New.
The cost of goods sold type is one of the Other Account Types. You may
want to create sub-accounts for each payroll tax. You can do this by
creating a parent account called Payroll Taxes, checking the box next
to Subaccount of, and entering in the Payroll Tax account when creating
the sub-accounts. Note: the sub-account types must match the parent
account selected.
2. Go to Lists > Payroll Item List
and edit your payroll tax items to map to the Cost of Goods Sold
payroll accounts you created above.
3. Click on the Payroll Item button and select New. Create an Addition
payroll item called "Allocated Admin Payroll Taxes". Select EZ Setup,
Other Additions, and map it to your regular payroll tax expense
account. Don't change any of the other defaults until you get to Gross
vs. Net. Change this to gross pay. You can enter an estimated % for
payroll taxes (make sure to enter the % after it) or if you want really
accurate job costing you may want to create separate payroll items for
each tax so you can set the % and upper limits for each one. Just don't
forget to adjust the upper limits each year.
4. Create a Deduction payroll item called "Admin Payroll Allocated to
Admin". Follow the same steps as you did when creating the Addition
payroll items, except select Other Deductions as the account type and
map it to your cost of goods sold payroll tax account.
5. Add the addition and deduction items to each admin employee's
Payroll and Compensation Info tab. Note: you must enter the deduction
payroll item on top of the addition payroll item, or you will change
the amount of net pay.
6. When you create paychecks for these employee in the future, the
addition payroll item will increase regular payroll expense, and the
deduction payroll item will decrease cost of goods sold by the same
amount. You can also edit prior paychecks by unlocking them. Just make
sure that the deduction item is ALWAYS listed first.
Article Source: http://
www.articlesbase.com/accounting-articles/how-to-allocate-payroll
-taxes-in-quickbooks-1001787.html About the Author
Ruth Perryman, MBA, CMA, CFE is the president of
the QuickBooks
Specialists, an Intuit Solutions Provider that was recently
named Intuit's top seller for the western
region and has provided QuickBooks help to
thousands of businesses all over the world since 1996. She is an
Advanced Certified QuickBooks ProAdvisor and a member of Intuit's
Trainer/Writer Network. She is also certified in QuickBooks
Point of Sale and QuickBooks
Enterprise.
Free version of QuickBooks
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