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A
accounting-healt
February 28, 2024
Question

What entry should I make to get tips collected into wages expense after it is paid to our employees?

  • February 28, 2024
  • 1 reply
  • 0 views
All of our tips collected flow through a liability account.  Once paid to our employees, it clears out of the liability account, however, it isn't ever being recording in wages expense.  What entry should be made so that the tips paid to employees is included in wages expense so that QB matches what is reported to the IRS for wages? Thank you.

1 reply

M
MelroseV
February 28, 2024

It's good to see you here in the Community space, accounting-healt.

 

We can create a tips item to ensure that it'll be recorded in the wages expense. I'm here to help you on how to do it.

 

Here's how:

  1. Go to Payroll.
  2. Click the Edit payroll items.
  3. Select the New payroll item drop-down arrow.
  4. Click Pay type and the Select drop-down arrow.
  5. Choose Other Earnings. Under Name, you can enter Tips.
  6. Select Create.

 

In case you need different payroll reports to view employee info, wages, taxes, and deductions, you can read this article: Run payroll reports.

 

If you have additional concerns regarding your tips in QuickBooks Online, please don't hesitate to post them here in the Community. Stay safe!

A
accounting-healtAuthor
February 28, 2024

I appreciate the response. I should've clarified, we do not use QB payroll. We're doing a manual entry to record the payroll done by a payroll service.

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