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Kate M
August 25, 2020
Question

Temporarily reduce salaries

  • August 25, 2020
  • 1 reply
  • 0 views

We're using QB Desktop Pro 2020.  We need to temporarily reduce our monthly salaries by a set dollar amount per employee.   What is the best way to do this?

 

Can I create a Payroll Item with the type as "Salary Reduction" and Tax Tracking as "Compensation", then within the individual Paycheck Details use that line item and enter a negative dollar amount? 

 

Or should the line item be "Deductions" and appear under "Deductions from Gross Pay"?  Will taxes then properly calculate?

1 reply

J
JonpriL
August 25, 2020

Hello @Kate M,

 

Yes, you can create a new payroll item as stated on the second line of your initial post. Doing so, it'll correctly post the reducing amount every time you create paychecks for your employee.

 

But I'd still recommend contacting your accountant for guidance as to how you create the payroll item. He/she can also provide the best solution needed so that your taxes is calculated correctly.

 

Lastly, here's an article you can read for ideas about how you can create an employee's paycheck: How do I create a paycheck for an employee?

 

If there's anything else that I can help you with, let me know in the comments. I'll be here to lend a hand.

K
Kate MAuthor
August 25, 2020

Thank you - I'll give that a try. 

 

I was talking with our CPA about it, but since he doesn't use QuickBooks he's a little hampered in giving specific QB guidance.  He was able to guide me as far as not classifying it as a deduction which wouldn't work since a deduction is then paid out by the company (ex; shared life insurance premiums, etc.).

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