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Payroll Tax items.

Forum|Forum|2 years ago
March 12, 2024
2 replies
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I'm using QB's Desktop Enterprise (Contractor 22.0). The issue I have is that the various payroll taxes for our direct employees are being charged to our G&A payroll expenses and not COGS.

Is it possible to set-up separate Payroll Tax items within QBs so that these burden costs are going to the correct GL accounts and still use QBs' Payroll Forms for reporting to the various agencies?

If so, what's the best way to set this up?

Thanks,

QuickBooks Desktop Payroll

Best answer by BigRedConsulting

@CEH-79 RE: Is it possible to set-up separate Payroll Tax items within QBs so that these burden costs are going to the correct GL accounts and still use QBs' Payroll Forms for reporting to the various agencies?

No, it's not possible. There can be only one payroll item for each tax in QuickBooks, and the account (or accounts, where there are two) is associated with the item, and so its not possible to set up more than one account configuration for any given tax.

In these cases, creating Journals to shift the expenses from one account to the other is usually the best solution.

M

MichaelaS

A clear definition of payroll tax items and cost of goods (COGS) is needed to organize the roles and responsibilities in QuickBooks Desktop (QBDT), @CEH-79.

COGS are normally affected by the sale of inventory items on invoices or sales receipts. On the other hand, the payroll expenses/liabilities are affected once taxes and employee wages are paid. As a result, they will be posted directly under those accounts.

If you need to change the account where payroll transactions are posted, edit the payroll item to update the posting location for your transactions. Let me show you how:

From the Lists menu, select Payroll Item List.
At the lower left side, click Payroll Item.
Select Edit item.
Select the Account dropdown to change the location.
Change the info needed on each window.
Then click Okay.

To ensure you choose the correct account, I recommend consulting an accounting professional to avoid possible errors or discrepancies.

Moreover, you can check this article to guide you through running, printing, and customizing payroll reports in QuickBooks Desktop Payroll: Run payroll reports.

Please keep me posted if you have additional questions about payroll taxes in QuickBooks Desktop. I'm here to help. Have a nice day.

BigRedConsulting

@MichaelaS RE: COGS are affected only by the sale of inventory items on invoices or sales receipts. On the other hand, the payroll expenses are affected once taxes and employee wages are paid. As a result, they will be recorded directly under payroll expenses.

Your word salad isn't correct at all:

- A user can use a GOGS account like any other income or expense account, in any way they want on most any type of transaction that they want. For example, a paycheck.

- Payroll expenses need not be recorded "under" payroll expenses, whatever that means. Again, a user can use most any account they want on payroll items for their payroll expenses.

- Paying accrued taxes is not an expense. And so, when taxes are set up correctly, paying payroll taxes does not impact any expense accounts. Paying taxes impacts payroll liability balances.

BigRedConsultingAnswer

@CEH-79 RE: Is it possible to set-up separate Payroll Tax items within QBs so that these burden costs are going to the correct GL accounts and still use QBs' Payroll Forms for reporting to the various agencies?

No, it's not possible. There can be only one payroll item for each tax in QuickBooks, and the account (or accounts, where there are two) is associated with the item, and so its not possible to set up more than one account configuration for any given tax.

In these cases, creating Journals to shift the expenses from one account to the other is usually the best solution.

C

CEH-79Author

Thank you for the reply.

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